August 5, 2024

By Gerelyn Terzo, Global AgInvesting Media

The Helios Climate, Energy Access, and Resilience (CLEAR) Fund, overseen by African-focused PE firm Helios Investment Partners, has reached its first close after securing $200 million in anchor investments across multiple companies and governments. British International Investment (BII), the UK’s development finance institution, committed $20 million to the fund, alongside climate investors European Investment Bank, Dutch entrepreneurial development bank FMO, and the Private Infrastructure Development Group’s InfraCo Africa, among others. Helios is expected to begin investing immediately.

The fund, which is designed to mobilize climate finance in Africa, will invest in mid-cap growth-businesses across the under-invested continent, targeting features like climate mitigation and adaptation. Helios views its investments through a “climate-first” lens touching on five key areas, including green energy solutions, climate-smart agribusiness, green mobility and logistics, recycling and resource efficiency, and climate enablers. CLEAR has set its sights on becoming the biggest Africa-focused climate fund with a target size of $400 million.

The fund will invest against the backdrop of Sub-Saharan Africa’s potentially vast renewable energy market, representing an investment opportunity of $193 billion in the 2023-2031 period, Mobilist research shows. Investments in this market segment could deliver IRRs in the range of 15 percent to 21 percent. However, Africa sees a modest 3 percent of global energy investment, according to International Renewable Energy Agency estimates. Since 2010, the cumulative investment into Sub-Saharan Africa’s energy transition has been a drop in the bucket compared with the financing need.

BII, an impact investor, has been an investment partner to Helios since 2007, with the UK’s development financial institution having also participated in Helios I, II and IV funds to support businesses across Africa. Last year, BII committed a total of £1.3 billion (US$1.6 billion) across markets, including £730 million (US$933 million) designated for Africa. For its part, Helios has invested more than $3 billion into African businesses, generating more than $9 billion in revenue across its portfolio companies while adding thousands of new jobs to the economy.

Christopher Chijiutomi, BII managing director and head of Africa, posted on LinkedIn, “We continue to make a real difference to the lives of millions of people living in Africa on behalf of the British tax payer.”

He also stated, “We are delighted to once again partner with Helios Investment Partners to support the growth of African companies. As the UK’s development finance institution, this investment also reinforces BII’s commitment to supporting Africa’s green transition. Mobilizing much-needed private capital into green sectors through this fund will help to drive innovation and create new opportunities, contributing to a resilient and prosperous future for Africa.”

InfraCo Africa (PIDG) CEO Gilles Vaes called the climate fund’s achievement a “watershed moment for African growth businesses – and the associated infrastructure – seeking to address the climate crisis,” adding: “CLEAR will unlock much-needed access to finance and exit routes for climate entrepreneurs whilst giving investors comfort that their investments will generate the growth they expect and support global efforts to address climate change.”

UK Minister for Development Anneliese Dodds said: “The UK-supported CLEAR Fund is a first of its kind to invest in mid-sized African companies seeking to avoid and reduce carbon emissions, helping people to become more resilient and to adapt to the climate crisis. It is a great example of how UK innovation is helping to mobilize climate finance for Africa, enabling businesses on the continent to deliver climate-friendly solutions. It’s one more step towards realizing our mission of a world free from poverty on a livable planet.”

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