Africa Climate Ventures (ACV), a startup venture fund, has secured £1 million (Sh171.1 million) to invest in environmentally friendly projects across the continent. The funding, provided by FSD Africa Investments (FSDAi) in the form of a convertible loan, aims to facilitate ACV’s expansion, enhance its ability to attract investments from larger funds, and support its organizational development. ACV has set its sights on building a portfolio worth $45 million (Sh6.2 billion) by the conclusion of 2024.
“We are thrilled that FSDAi has joined us in building ACV, and has already been invaluable in refining the ACV model,” said ACV chief executive and founder James Mwangi who is best known as a co-founder of Dalberg Advisors, the firm’s first elected global managing partner and then Dalberg Group’s executive director.
FSD Africa Investments (FSDAi), the investment arm of FSD Africa, a UK International Development-funded regional program operating from Kenya across more than 30 countries, has made significant commitments to ACV. In addition to the £1 million capital investment, FSD Africa will provide a grant of £75,000 to support the development of premium carbon credits and marketing efforts for ACV’s portfolio and pipeline companies.
Furthermore, FSDAi has secured the option to invest up to £8 million during ACV’s planned 2024 close. ACV’s dedicated team aims to establish a portfolio of climate-positive businesses throughout Africa, with a goal of launching and scaling 15 ventures over the next four years.
ACV’s approach involves adding carbon revenue streams to existing African businesses, introducing proven global climate technology to the continent, and facilitating the expansion of technologies and business models while mitigating risks.
This investment in ACV is part of FSDAi’s broader strategy to support innovative green investment vehicles, including Persistent Energy, which focuses on off-grid energy and e-mobility in sub-Saharan Africa, and Nithio, an investor in renewable off-grid energy.
“In backing the ACV partners, FSDAi sees a tremendous opportunity to galvanise global investment and finance to promote Africa’s status as the pre-eminent climate investment destination,” said Anne-Marie Chidzero, the chief investment officer at FSDAi.
Ultimately, FSD Africa believes that ACV can help the continent’s businesses participate in global carbon markets and capitalise on the continent’s unrivalled capacity for profitable climate-smart businesses.
