The Africa Renewable Energy Fund II (AREF II) has raised Euro 130 million from seven investors to finance renewable energy development in sub-Saharan Africa, excluding South Africa. The investors in the AREF II include the Swedish government’s Swedfund, the UK government’s CDC Group, CDP, and the African Development Bank’s (AfDB) Sustainable Energy Fund for Africa. Proparco, the subsidiary of the French Development Agency (AFD) group, also participated in the first financial mobilisation of AREF II. The new fund is being managed by Berkeley Energy and is also supported by the Netherlands Development Finance Company, and the Clean Technology Fund (CTF), which is part of the Climate Investment Fund (CIF).
The participating financial institutions have all been very active in renewable energy in Africa, over the last decade. The funds that they have mobilised are to be used to finance clean energy, including wind, solar, run-of-river hydro, and storage projects. AREF II aims to mobilise a further Euro 300 million to increase Africa’s renewable energy footprint.
Sub-Saharan Africa’s demand for electricity is expected to more than double by 2040 with high population growth rates and rising GD. Further, to meet this demand, the region requires investments in power sector infrastructure of around $100 billion per year. AREF II is ready to seize this market opportunity by supporting medium-sized grid-connected projects between 10 and 100 MW each.
AREF II will have a significant and measurable impact at the regional and local level, through the provision of clean and affordable energy, while generating substantial local economic development and employment opportunities through infrastructure projects. The new fund follows on from AREF which contributed to the development of many renewable energy projects in the continent.