A Commitment of USD 20M to the Evolution III Fund for Clean Energy in Africa
Finnfund, a Finnish development financier and impact investor, has announced a USD 20 million commitment to Evolution III Fund, a Pan-African equity fund aimed at increasing clean energy availability and accessibility and energy efficiency.
According to Riikka Molander, Associate Director and Head of Funds at Finnfund:
“Our investment in Evolution III Fund marks our commitment to enhancing the production and availability of clean energy across the African continent as well as fight against climate change. This investment builds on several Finnfund’s strategic goals, such as making EUR 1 billion worth of new investment in climate finance by 2030 as well as maintaining our investment portfolio carbon net negative.”
Finnfund’s contribution is part of the Fund’s initial closing, managed by Inspired Evolution Managers Limited, a Pan-African climate-focused private equity firm focused on clean energy infrastructure and energy and resource-efficiency growth investments.
Evolution III closed with conditional commitments totaling USD 199.4 million from seven international investors, including several development finance institutions. It left a 12- to 18-month window to reach its target close of USD 400 million in capital commitments. Over a five-year investment period, the Fund will target 10 to 15 investments.
Since 2007, Inspired Evolution has financed the development and operation of more than 2 GW of renewable energy infrastructure-type generation projects and multiple growth equity investments in Sub-Saharan Africa. The firm’s primary investment themes are clean energy infrastructure, energy access, energy and resource efficiency, and the value chains that support them.
Access to reliable and clean electricity in Africa needs to catch up to that of the rest of the world. With a 46% electrification rate, 590 million people in Sub-Saharan Africa remain without access to electricity. This situation exacerbates socioeconomic inequalities and impedes progress toward greater equality.
Africa has massive solar and wind potential and vast hydropower resources. The funding required to facilitate Africa’s energy transition to a net-zero energy mix by 2050 is estimated to be around USD 2.8 trillion. To meet the SDGs (Sustainable Development Goals) for climate action and energy, Africa’s generation capacity must be doubled by 2030 and multiplied fivefold by 2050.