In a groundbreaking move aimed at accelerating renewable energy access in Sub-Saharan Africa, the Board of the Green Climate Fund (GCF) has given its nod to invest $50 million in equity into REPP 2. Developed by climate and impact fund manager Camco, REPP 2 is a pioneering $250 million fund strategically designed to make significant strides in climate impact, economic growth, and gender equality while ensuring sustainable returns for investors.
The latest research reveals a stark reality approximately 590 million people in Sub-Saharan Africa lack access to electricity. Addressing this urgent need, REPP 2 is structured as a paradigm-shifting blended finance facility. Leveraging public, private, and commercial funding, the initiative plans to invest in small-scale and decentralized renewable energy projects across Sub-Saharan African nations.
Over the lifetime of REPP 2, the fund intends to make 35-40 investments supporting decentralized renewable energy, fortify national grid infrastructure, and spur economic development, especially in Least Developed Countries. The impact is expected to be substantial, providing new or improved access to clean, reliable, and affordable power to 7.7 million people across Africa. Additionally, the initiative aims to mitigate 12.7 million tonnes of carbon dioxide equivalent in greenhouse gas emissions, marking a significant contribution to climate change mitigation efforts.
REPP 2’s innovative approach also includes a focus on gender equality. The fund plans to invest $70 million in projects aligned with the 2X gender lens investing criteria, fostering inclusivity and empowerment in the renewable energy sector.
Notably, REPP 2 represents an evolutionary step from its predecessor, the $120 million REPP facility, which was fully funded by the UK’s Foreign, Commonwealth, and Development Office (FCDO). Today’s announcement follows the signing of an indicative term sheet for a junior equity investment of up to $50 million from REPP into REPP 2. The combined junior equity investments of up to $100 million from the GCF and REPP are crafted to protect capital while generating appropriate returns for REPP 2’s commercial investors.
Ben Hugues, Investment Director at Camco, expressed his enthusiasm about the venture, highlighting REPP 2’s potential to foster Africa’s green growth and provide sustainable financial returns alongside developmental, social, and environmental benefits.
Peter Coveliers, a REPP Board member and one of the founders of the REPP initiative, emphasized the instrumental role of blended finance in attracting private sector funds to support Africa’s clean energy transition and green growth. He underscored the excitement of supporting REPP 2 as it builds upon the legacy of REPP’s impactful achievements.