The International Finance Corporation (IFC) has invested Sh647.4 million ($5 million) in Equator Africa, a Kenyan venture capital fund that focuses entirely on climate innovation businesses, to help in the battle against climate change.
The investment, which will be partly guaranteed by the Korea Green Innovative Development Programme to the tune of $1.5 million (Sh194.2 million), is the fund’s last for the year and brings the fund’s total amount raised during this round to $54 million (Sh6.9 billion).
The finances will enable Equator, which is based in Nairobi, to expand its funding for climate technology start-ups on the continent, helping with the mitigation of climate change effects and adaptation to the changing realities caused by climate change, focusing primarily on Kenya and Nigeria.
“Climate tech is an exciting area of innovation and impact in Africa, where businesses are helping economies grow while reducing emissions and resource use,” said IFC’s director for disruptive technologies, services, and funds Farid Fezoua.
“IFC’s investment in Equator Africa reflects our commitment to supporting those businesses to deliver solutions, from renewable energy to electric vehicles.”
Equator has already invested in some six companies that operate in Africa and other emerging markets, three of which are domiciled in Nairobi and primarily operate in the Kenyan market.
In Kenya, Equator co-invested Sh1.8 billion ($14 million) alongside other investors in electric mobility company Roam in March this year, and it has invested Sh388 million ($3 million) in off-grid solar company SunCulture.
The fund has also invested an undisclosed amount in food security firm Apollo Agriculture, which is based in Nairobi.
Other investees of Equator include Odyssey, Ibisa and DownForce Technologies, all of which are based from outside the continent but with operations in Africa.
The transaction marks IFC first first-ever investment in a venture capital fund that primarily funds climate tech companies and is part of its new $225 million (Sh29 billion) venture capital platform for Africa, the Middle East, Central Asia, and Pakistan.
