Development Today

Danish energy investment fund for Africa launched

The Danish aid-financed investment fund IFU has contributed to the establishment of a new  EUR 60 million fund targeting renewable energy projects in Eastern and Southern Africa, DI Frontier Market Energy & Carbon Fund.

 It is a Danish-based fund managed by Frontier Investment Management in Copenhagen. The fund will invest equity in smaller energy projects ranging from EUR 3 million to EUR 100 million.

The fund’s investments are expected to range from EUR 3 to 10 million and will aim for green field projects contributing to reducing CO2 emissions. The focus will be on wind, hydro power and biomass projects with both local and international partners, according to a press release.

IFU points out that the demand for energy is huge in many African countries.

“Renewable energy in Africa is a new market for Danish businesses and our hope is therefor that the fund ... can contribute to Danish firms getting a foothold in new growth markets,” says Deputy Managing Director Torben Huss at IFU.

The fund will have its main focus on Kenya, Mozambique, Tanzania, Uganda and Zambia. Eight foreign and Danish investors are behind the new fund, including the British Commonwealth Development Corporation, the EU Fund, the Global Energy Efficiency and Renewable Energy Fund, which is managed by the European Investment Bank.

Danish Tryg, PensionDanmark and Danish Industry Foundation have also invested in the fund.