Green Climate Fund Approves $50 Million for REPP 2 to Boost Renewable Energy in Africa
The Green Climate Fund (GCF) has approved a $50 million equity allocation to REPP 2, a new debt fund that will provide an opportunity to invest in the rapidly growing renewable energy sector in sub-Saharan Africa.
REPP 2 is being developed by Camco, a climate and impact fund manager, and is designed to generate substantial climate, economic, and gender-related impacts while also ensuring sustainable returns for its investors.
Sub-Saharan Africa is facing a significant challenge, with approximately 590 million people lacking access to electricity.
The International Energy Agency estimates that $22 billion is required annually to provide reliable energy access throughout the continent by 2030.
Additionally, Africa is grappling with an escalating series of climate-related challenges, and its nations need an estimated $2.8 trillion by 2030 to fulfill their Nationally Determined Contributions under the Paris Agreement.
REPP 2 has been structured as an innovative blended finance facility, leveraging a combination of public, private, and commercial funding to invest in small-scale and decentralized renewable energy projects in sub-Saharan African countries.
Through its private sector approach and a strong focus on supporting communities vulnerable to climate change, the fund is expected to make 35 to 40 investments over its lifetime.
These investments will support the development of decentralized renewable energy sources and enhance the resilience of national grid infrastructure, thereby promoting economic development in sub-Saharan Africa.
It is anticipated that REPP 2 will provide new or improved access to clean, reliable, and affordable power to 7.7 million people across Africa.
This will not only increase economic opportunities but also enhance access to productive energy-related activities.
Furthermore, the fund aims to mitigate 12.7 million tonnes of carbon dioxide equivalent in greenhouse gas emissions over the lifetimes of its projects.
Additionally, it intends to invest $70 million in projects aligned with 2X’s gender lens investing criteria and mobilize $786 million in third-party funding to promote green growth in target countries.
The blended finance structure of REPP 2 represents an evolutionary advancement from the $120 million REPP facility, which was previously fully funded by the UK’s Foreign, Commonwealth, and Development Office.
This development follows the signing of an indicative term sheet by the REPP board for a junior equity investment of up to $50 million from REPP into REPP 2.
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