FSD Africa raises Sh171 million for a Green Technology fund

Africa Climate Ventures (ACV), a newly established venture capital firm, has raised £1 million (Sh171.1 million) for investments in businesses in the continent that are dedicated to environmentally friendly projects.

A convertible loan was used to raise the money from FSD Africa Investments (FSDAi) in order to support the venture builder’s formalization and increase its ability to draw investments from larger funds.

By the end of 2024, ACV hopes to have built up a portfolio worth $45 million (Sh6.2 billion).

“We are thrilled that FSDAi has joined us in building ACV and has already been invaluable in refining the ACV model,” said ACV chief executive and founder James Mwangi who is best known as a co-founder of Dalberg Advisors, the firm’s first elected global managing partner and then Dalberg Group’s executive director.

The investing division of FSD Africa, a regional program supported by UK International Development and based in Kenya, is called FSDAi. FSD Africa operates in more than 30 countries.

FSD Africa will contribute £75,000 in grant money in addition to the capital investment in ACV to help with the creation of premium carbon credits and the promotion of portfolio and pipeline businesses.

Moving forward, FSDAi has obtained permission to contribute up to £8 million to the anticipated 2024 close of ACV.

With the ultimate goal of launching and scaling 15 ventures in the following four years, the venture builder’s team is working to develop a portfolio of climate-positive businesses across Africa.

Adding carbon revenue streams to already-existing African businesses, bringing in tried-and-true global climate technology for use in Africa, and speeding up and reducing the risk of the expansion of technologies and business models across the continent are all goals of ACV in building this portfolio.

ACV is the most recent in a string of investments made by FSDAi in cutting-edge green investment vehicles, such as Nithio, which invests in renewable off-grid energy, and Persistent Energy, a pioneer in the off-grid energy and e-mobility sectors in sub-Saharan Africa.

“In backing the ACV partners, FSDAi sees a tremendous opportunity to galvanise global investment and finance to promote Africa’s status as the pre-eminent climate investment destination,” said Anne-Marie Chidzero, the chief investment officer at FSDAi.

In the end, FSD Africa thinks that ACV can assist the continent’s companies in participating in international carbon markets and leveraging the continent’s unmatched capacity for successful climate-smart businesses.

In the end, FSD Africa thinks that ACV can assist the continent’s companies in participating in international carbon markets and leveraging the continent’s unmatched capacity for successful climate-smart businesses.