The Green Climate Fund (GCF) has approved a $50m equity investment in REPP 2, a new debt fund providing an opportunity to invest in Sub-Saharan Africa’s fast-growing renewable energy market.

Climate and impact fund manager Camco is developing REPP 2 as a $250m fund designed to deliver significant climate, economic and gender impacts while ensuring sustainable returns for investors. 

Ben Hugues, Investment Director at Camco, said: “REPP 2 builds on the successes and lessons from REPP to provide a new fund that will offer significant commercial investment into Africa’s renewable energy sector, underpinning the continent’s green growth potential. Drawing on Camco’s 30-year track record in renewable energy investing, REPP 2 is projected to deliver sustainable financial returns and multiple developmental, social and environmental benefits.”

“We are naturally delighted at the prospect of working with the Green Climate Fund on this new venture.”

Latest research shows that approximately 590 million people in Sub-Saharan Africa do not have access to electricity, with the International Energy Agency claiming $22bn is needed annually to deliver reliable energy access across the continent by 2030 to meet SDG7. 

At the same time, Africa is facing increasing climate hazards and countries require as estimated $2.8trn by 2030 to implement their Nationally Determined Contributions under the Paris Agreement.

REPP 2 has been structured as a paradigm-shifting blended finance facility leveraging public, private and commercial funding to invest in small-scale and decentralised renewable energy projects in Sub-Saharan African countries.

Through its private sector approach, and a strong focus on supporting communities vulnerable to climate change, it is projected that over REPP 2’s lifetime the fund will make 35-40 investments that support the development of decentralised renewable energy and strengthen the resilience of national grid infrastructure to promote economic development in Sub-Saharan Africa, particularly in Least Developed Countries.

The Fund will provide 7.7 million people with new or improved access to clean, reliable and affordable power across Africa, increasing economic opportunities and access to productive use of energy activities, and mitigate 12.7 million tonnes of carbon dioxide equivalent in greenhouse gas emissions over projects’ lifetime.

The fund will also invest $70m in projects aligned with 2X’s gender lens investing criteria, and mobilise $786m in third-party funding for green growth in target countries.

With its blended finance structure, REPP 2 represents an evolutionary step from the $120m REPP facility, which was fully funded by the UK’s Foreign, Commonwealth and Development Office (FCDO).

The announcement comes after the REPP Board signed an indicative term sheet for a junior equity investment of up to $50m from REPP into REPP 2. 

The combined junior equity investments of up to $100m from the GCF and REPP are designed to protect capital, and to generate an appropriate level of returns to REPP 2’s commercial investors.

Peter Coveliers, REPP Board member and one of the founders of the REPP initiative, said: “Blended finance is instrumental in attracting private sector funds to support a clean energy transition and green growth in Africa.

“By building on the many strengths of REPP and by adopting a well-designed blended finance structure, REPP 2 has the potential to unlock significant additional investment capital to fund climate-related projects on the continent. It's truly exciting to be part of supporting REPP 2 as it builds upon REPP’s impressive legacy of achievements.”