Green technology fund raises Sh171 million from FSD Africa

Venture fund startup Africa Climate Ventures (ACV) has raised £1 million (Sh171.1 million) for investing in companies focused on environment-friendly projects in the continent.

The capital raised from FSD Africa Investments (FSDAi) is in the form of a convertible loan to support the venture builder’s formalisation and develop its capacity to attract investments from larger funds.

ACV is working to build a $45 million (Sh6.2 billion) portfolio by the end 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.

FSDAi is the investing arm of FSD Africa, a UK International Development-funded regional programme operating in more than 30 countries from its Kenya base.

On top of the capital investment in ACV, FSD Africa will provide £75,000 in grant funding to support the development of premium carbon credits and the marketing of portfolio and pipeline companies.

Moving forward, FSDAi has secured the right to invest up to £8 million in ACV’s planned 2024 close.

The venture builder’s team is working to build a portfolio of climate-positive businesses across Africa, with the ultimate aim of launching and scaling 15 ventures in the next four years.

ACV is seeking to build this portfolio by investing to add carbon revenue streams to existing African businesses, bring proven global climate technology to Africa and accelerate and de-risk the continental expansion of technologies and business models.

ACV is the latest in a series of investments by FSDAi in innovative green investment vehicles including Persistent Energy — a pioneer investor in the off-grid energy and e-mobility sectors in sub-Saharan Africa— and Nithio, which invests 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.

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