Mix of debt and equity investments from investors including EIB, FSD Africa Investments, Jaltech Fund Management and Symbiotics Investments keep plans on track for USD 50m initial close in Q4 2023. Subsequent close of at least USD 100m expected within two years.
Funding earmarked to help the financing platform scale energy efficiency and captive generation solutions in Sub-Saharan Africa’s commercial and industrial sectors.
Nairobi, 6 September 2023: Leading climate and impact fund manager Camco has announced commitments of almost USD 25m in equity and debt funding for Spark Energy Services (Spark), its innovative financing platform supporting energy efficiency and captive solar initiatives in Sub-Saharan Africa’s commercial and industrial (C&I) sector.
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.
Today’s 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 responding to this challenge by 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 serve to 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% upfront financing for the installations and has to date supported eight projects in Kenya and South Africa through an initial USD 3m 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 USD 50m targeted initial close, including USD 3m from UK government-funded FSDAi, USD 2.2m from Jaltech Fund Management and over USD 3m from Camco. EIB is the sole junior lender, having committed USD 10 million in junior debt, with Symbiotics Investments committing USD 5 million in senior debt as part of a senior debt consortium expected to commit up to USD 30m by Q4 2023. Camco is now targeting the close of USD 50m by Q4 2023 and a subsequent close of at least USD 100m within two years.
Adam Fitzwilliam, Director of Spark, said: “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. 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.”
Thomas Östros, European Investment Bank Vice President, said: “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. 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.”
Today’s announcement by UK-headquartered Camco comes after the UK government announced GBP 49m (~USD 62m) 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.
Andrew Mitchell, UK Minister for Development and Africa, said: “The climate finance projects we announced demonstrate the strength of our commitment to Africa’s green future. UK leadership is determined to unlock the funding needed internationally to drive forward the green agenda. Our ambitions can only be realised through partnership and cooperation with Africa and the international community. We are stronger together - and we go far when we go together.”
Anne-Marie Chidzero, Chief Investment Officer, FSDAi, said: “This investment, part of a package of investments totalling USD 19.5m which we are announcing this week, shows our determination to invest in solutions that deliver for both people and planet by bridging the gaps in current financing structures and so enabling investment to flow to the parts of the green economy where it is most needed.
“Spark’s innovative financing platform is a great example of this. By addressing the lack of suitable financing for sustainable energy sources for C&I consumers, it will contribute to lower greenhouse gas emissions and improved climate resilience as well as economic growth.”
Thomas Varela, Symbiotics Investments Senior Investment Analyst, Clean Energy, said: "This transaction exemplifies Symbiotics Investments' approach to clean energy investment, as we thrive to push capital where it usually doesn't flow. Our funding for Spark will bolster the expansion of local developers, typically SMEs, who often face challenges in accessing the necessary capital to scale their operations. This is particularly pertinent for energy efficiency projects backed by Spark—a segment that continues to be underfunded despite its significant potential for climate mitigation."
Notes to editors
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About Spark Energy Services
Spark Energy Services (Spark) is an innovative finance platform created by Camco to support the deployment of captive generation and energy efficiency solutions in Africa’s C&I sector.
Camco is a specialist climate and impact fund manager, leading the transition in emerging markets. We offer clean, secure investments, pairing the conscience of a development bank with the agility of a private company. Camco is an Accredited Entity of the Green Climate Fund and is authorised and regulated by the UK Financial Conduct Authority. The company has offices in Accra, Auckland, Helsinki, Johannesburg, London, Nairobi, Sydney and Toronto.
About European Investment Bank
The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.
EIB Global is the EIB Group’s specialised arm dedicated to increasing the impact of international partnerships and development finance. EIB Global is designed to foster strong, focused partnership within Team Europe, alongside fellow development finance institutions, and civil society. EIB Global brings the Group closer to local people, companies and institutions through our offices across the world.
About FSD Africa Investments
FSD Africa Investments (FSDAi) is the investment arm of FSD Africa, a UK International Development-funded regional programme, based in Kenya, that operates in over 30 countries to make finance work for Africa's future. FSDAi invests in novel financial instruments, facilities and intermediaries to support of policy objectives and accelerate the role of finance in Africa’s green economic growth. FSDAi, a private company with shareholders including FSD Africa and the UK's FCDO, employs diverse investment instruments while embracing considerable risk. FSDAi bridges funding gaps by supporting novel financial solutions for transformative change in Africa's financial markets to deliver better-quality jobs and economic opportunities, equitable access to basic services, reduction of human vulnerability and inequity, and environmental benefits.
About Symbiotics Investments
Symbiotics is the leading market access platform for impact investing, dedicated to private markets in emerging and frontier economies. The group offers investment, asset management and capacity building services. Since 2005, Symbiotics Investments has originated over 7,500 investments representing more than USD 9.4 billion for 575 companies in 95 countries.
About Jaltech Fund Management
Founded in 2010, Jaltech is a boutique alternative investment fund manager, managing over ZAR 1.7bn (~USD 90m) of retail investors’ capital. Jaltech’s team is made up of entrepreneurs and financial professionals with a wealth of knowledge and experience in managing alternative investments.