African Transition Acceleration Fund (ATAF 1), managed by African Infrastructure Investment Managers (AIIM),  is the newest pan-African investment vehicle, designed to support Africa’s energy transition.

“The fund has an active pipeline across its key sectors but has not yet started investing,”Lisa Pinsley, Fund Head and Member of AIIM’s Executive Committee, told Africa Global Funds.

The Fund will focus on early-stage and scaling up investments across three core energy transition themes: clean electrons, clean molecules and sustainable transport. 

This includes on-grid and off-grid renewables, energy efficiency, transmission, power to x, electric vehicles, biofuels and green ammonia/fertilizer sectors, Pinsley said.

"We will be investing in early-stage developers, as well as companies seeking scale up capital,” she commented. 

The Fund will invest across Africa, with a focus on companies and platforms in the larger markets.

“We are planning to invest in platforms or companies not individual projects. Our capital will be used to develop pipeline, strengthen management teams, and invest in the projects that the platform company builds,” she said.

“While there is no shortage of capital for mid to late stage investing in the African energy transition space, including from AIIM’s other funds and from my alma mater Actis, we believe there is a gap in early stage funding for African energy transition developers and companies,” she added.

“This creates a bottleneck for further expansion and financing for the sector and therefore limits growth,” Pinsley stressed.

ATAF 1, based on the AIIM team’s two decades of history in the sector, takes a commercial approach to scaling energy transition companies, thereby unlocking more capital for the sector.

The ATAF team is prioritizing investments in countries and markets where the government is providing the underlying regulation and the political will to accelerate the energy transition, Pinsley said.

For example, she said, a key trend to follow is the liberalization of the power market to allow for wheeling of power from producer to consumer over the utility’s transmission and distribution systems, or via regional power pools. 

“There is a misperception in the market that the energy transition is driven by government subsidy; this is not the case,” she said.

“Government needs to provide a level playing field for all to participate in an open market, whether that’s power, transport, or fuels,” she added.