Swedfund, Sweden’s development finance institution with the mission to reduce poverty through sustainable investments in developing countries, is providing a US$20 million loan to the Africa Go Green Fund to support companies that reduce emissions and improve energy efficiency across Africa.Â
The investment will increase access to debt financing for businesses working in areas such as green buildings, clean cooking, green transport and industrial energy efficiency.
Gunilla Nilsson, director of investment and head of energy and climate at Swedfund says “Energy efficiency is one of the most practical ways to reduce emissions while lowering costs. Through this investment, Swedfund will support companies providing solutions that people use in everyday life, from cleaner cooking to more energy efficient housing and transport”.
Energy demand in Africa continues to grow, while many companies in the energy efficiency space lack financing that matches their long-term investment needs. This limits the scale up of solutions that can reduce emissions, lower costs and improve the reliability of essential services.
The Africa Go Green Fund has already financed close to 30 projects across 17 countries in Africa; and is expanding its lending activities to reach more companies providing energy efficiency solutions.
Swedfund’s investment will strengthen the fund’s capacity to provide financing to companies that can deliver significant climate benefits but often struggle to access debt on suitable terms. By investing alongside other public and private investors, Swedfund also helps mobilise additional capital for energy efficiency solutions across Africa.
Africa Go Green Fund is a pan-African fund providing debt financing to businesses and projects that reduce greenhouse gas emissions, including industrial energy efficiency, green buildings, clean transport and green appliances. It was established by KfW and is managed by Cygnum Capital, an investment bank and asset manager with offices across Africa, Europe and the Middle East.
Swedfund also plays an important role in the implementation of the 2030 Agenda and the Paris Agreement on climate. It shares the same goal as development cooperation in general, but the tools Swedfund uses are different. Swedfund has two instruments to fulfil its mission: sustainable investments in the private sector and technical feasibility studies through the Project Accelerator targeting the public sector.
Swedfund’s investments contribute to the creation of decent jobs and increased access to essential products and services such as electricity and food. Swedfund is a long-term investor and is additional and catalytic through its investments and by mobilising private capital. Swedfund’s feasibility studies support sustainable public infrastructure development, trade, and export opportunities for Swedish solutions.
