Gaia to raise $200m for Africa in Luxembourg climate fund
Gaia Fund Managers is raising $200-million for investment in African renewable energy plants and power grids with the assistance of Apex Group.
The money will be raised through the Gaia Africa Climate Fund which will be domiciled in Luxembourg to allow US and European investors direct access. Apex Group will act as fund administrator.
Investors are conducting their due diligence checks and some have committed to provide the first $50-million this year, according to Renier de Wit, MD of Gaia Fund Managers. The fund is expected to be fully capitalised by the end of 2025, he said.
About half of Africa’s population, or about 600 million people, have no access to electricity, according to research done by the South African Institute of International Affairs. The continent has significant renewable energy resources which remain untapped due to lack of funding, stoking the demand for private developers to raise capital for green energy infrastructure such as solar, wind and hydro projects that attract funding more easily then fossil fuel plants.
Gaia, a South African fund manager, will also list vehicles on the Kenyan and Botswana stock exchanges to ensure indirect access for institutional and pension fund investors from those countries.
The climate fund will operate as a so-called yieldco, which invests in plants that are operating to free up money for developers to build new facilities, De Wit said.
The new fund will expand its focus beyond South Africa and seek opportunities across sub-Saharan Africa to give it geographical diversification. It will also invest in hydropower and transmission lines in addition to solar and wind.
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