One of the biggest challenges facing the world today is undoubtedly climate change. Initiatives are multiplying everywhere, even if the fight is far from won. This is the meaning of the Low Carbon Economy Fund for Africa (E3LCEF). It has just reached its first round of financing to the tune of $48.1 million.
In detail, a document states, “the early-stage venture capital fund will focus on investing in the next generation of low-carbon entrepreneurs in Africa, developing new technologies and business models enabled by the low-carbon economy. The fund will invest in early-stage companies and hold significant capital for follow-on in later rounds.
The fund, housed in Luxembourg but whose investment teams are based in Kenya, was supported by KfW, FMO, Sweedfund International and Proparco. It is targeting a second and final closing of up to $100 million within 12 months.” With this approach, E3LCEF will invest in companies across sub-Saharan Africa, but priority will be given to entrepreneurs with a clear product-market fit and strong business potential in the low-carbon economy. “The fund aims to support the next generation of innovative companies that will have a positive impact on the continent,” explains the presentation document.
New approach to financing
Speaking about the international financial system, UN Secretary-General Antonio Gutierres called it “outdated, unfair and dysfunctional.” An observation that calls for new financing approaches. Indeed, while it has significant natural potential with 40% of the world's reserves of cobalt, manganese and platinum, essential for batteries and hydrogen fuel cells, the African continent has attracted "only" 2 % of global investments in the energy transition over the past decade. The challenge today, according to leaders who gathered at the Nairobi Summit, is to achieve an investment of $600 billion to increase Africa's renewable energy production capacity to at least 300 gigawatts here in 2030.
Initiatives are multiplying
With a goal of 100 million, the E3LCEF intends to contribute a lot to the question of financing. But it won't be easy. Increasingly, innovative initiatives are multiplying. Several climate-focused funds in Africa are playing an important role to finance technological solutions to mitigate the effects of climate change. These include Novastar's $200 million Africa People + Planet fund and Equator's climate technology venture fund, which support startups focused on agriculture, climate solutions and energy. clean. Other recent climate-focused investment vehicles in Africa include Satgana, the AfricaGoGreen Fund (AAGF) and the Energy Entrepreneurs Growth Fund (EEGF).
African startups in the age of climate change
While several challenges still remain to be met, startups are competing in creativity. In Uganda, for example, to address local environmental challenges, Rachael Nabunya Kisakye, a project engineer for Ugandan company Tusk Engineers, designed dry toilets. According to him, these are “environmentally friendly toilets, connected to a biogas digester which converts human excrement into a quality fertilizer that can be handled safely and used for agriculture. Through this same process, we also produce fuel (biogas) which can be used for cooking, heating and lighting. This comprehensive system combines aspects related to energy, sanitation, environmental protection and agricultural production in a single cycle, and we are very proud of it.”
In Niger, Abdou Maman, an expert in information and communication technologies and founder of Tech Innov, designed a solution that allows farmers to control their irrigation systems remotely using their mobile phone. Also, the solution allows you to regulate the water flow using their phone. It also helps collect and share meteorological and hydrological data by real-time and remotely, including temperature, soil water content, precipitation, solar radiation and wind force. “It will also make agriculture more attractive to young people, help increase the penetration rate of mobile phones, generate more traffic for operators and relieve young girls of the burden of fetching water, thus giving them time to go at school,” says its inventor.