Equity commitments have come from specialist development agency FSD Africa Investments (FSDAi), Jaltech Fund Management and Camco, which designed and manages Spark, with the European Investment Bank (EIB) and Symbiotics Investments being amongst a group of lenders providing junior and senior debt to the platform.
The announcement was made during the inaugural Africa Climate Summit being held in Nairobi this week to drive green growth and climate finance solutions for Africa and the rest of the world.
Spark is supporting a just energy transition with localised impacts through the deployment of fully financed on-site renewable energy and energy efficiency initiatives among local C&I businesses, with a particular focus on the SME segment.
These projects help decarbonise the C&I sector while curbing rising energy expenses and improving the reliability of supply - a critical enabler for green economic development. The platform is doing this by providing its growing network of local project implementation partners with up to 100 percent upfront financing for the installations and has to date supported eight projects in Kenya and South Africa through an initial $3 million seed facility.
For investors, Spark provides access to a diversified portfolio of clean energy projects across Africa, offering favourable risk-adjusted returns from a climate-positive investment combined with a strong, transparent and robustly measured ESG and sustainable development impact profile.
Commitments have so far been made for the full equity allocation for Spark’s $50 million targeted initial close, including $3 million from UK government-funded FSDAi, $2.2 million from Jaltech Fund Management and over $3 million from Camco. EIB is the sole junior lender, having committed $10 million in junior debt, with Symbiotics Investments committing $5 million in senior debt as part of a senior debt consortium expected to commit up to $30 million by Q4 2023. Camco is now targeting the close of $50 million by Q4 2023 and a subsequent close of at least $100 million within two years.
“With power demand from Sub-Saharan Africa’s C&I sector expected to double between 2020 and 2040, addressing the sector’s emissions growth is a climate imperative” said Adam Fitzwilliam, Director of Spark. “At the same time, the sector is suffering from an expensive, unreliable and polluting power supply that is hampering growth, with limited access to finance meaning very few SMEs have the necessary upfront capital to invest in clean energy solutions. Camco designed Spark to respond to these challenges and support green growth on the continent and today’s announcement is a clear demonstration of our investors’ confidence in the platform. We are thrilled to announce a strong set of partners despite a challenging broader investment climate.”
The announcement by UK-headquartered Camco comes after the UK government announced £49 million around $62 million) worth of new projects to fight climate change in Africa during Africa Climate Summit this week, including through UK-backed FSDAi's investment in Spark.
“Ensuring that African industry and business can accelerate investment to cut energy bills, harness renewable energy and reduce carbon emissions is crucial for delivering climate action in Africa” added Thomas Östros, European Investment Bank Vice President. “As highlighted at the African Climate Summit this week, the European Investment Bank is pleased to support Spark’s visionary engagement that mobilises private capital to accelerate business-led climate investment.”
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