South Africa based Gaia Fund Managers, with support from Apex Group, is in the process of securing $200 million (approximately R3.6 billion) to invest in renewable energy projects and electrical grids across Africa.
The initiative, named the Gaia Africa Climate Fund, will be based in Luxembourg, providing a channel for investors from the US and Europe to contribute directly. Apex Group is set to manage the fund’s operations, according to Bloomberg.
The fundraising efforts are underway, with due diligence being performed by potential investors. A portion of the funds, amounting to $50 million (around R912 million), has already been pledged for this year, as stated by Gaia Fund Managers’ managing director, Renier de Wit.
The goal is to have the fund fully financed by the close of 2025.
Research from the South African Institute of International Affairs indicates a significant electricity deficit in Africa, with nearly 600 million people without power.
The continent’s abundant renewable energy potential remains largely untapped, creating an opportunity for private investment in sustainable energy projects like solar, wind, and hydroelectricity, which are more attractive to investors compared to fossil fuel-based options.
To broaden investment access, Gaia plans to list investment vehicles on the stock exchanges of Kenya and Botswana, targeting institutional and pension fund investors in those regions. The climate fund is designed to function as a yieldco, investing in operational plants to release capital for the development of new energy projects.
De Wit said that the fund will not limit its scope to South Africa but will pursue investment opportunities throughout sub-Saharan Africa, including in hydroelectric power and transmission infrastructure, alongside solar and wind energy ventures.
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