The African Renewable Energy Fund (AREF), a dedicated renewable energy fund focused on sub-Saharan Africa, has successfully reached its final close at its hard cap, with $200m of committed capital to support small- to medium-scale projects.

The African Development Bank (AfDB) and its Sustainable Energy Fund for Africa (SEFA) are the fund’s lead sponsors, with equity investment of $25m and $25.5m respectively, alongside $4.5m from the Global Environment Facility (GEF).

SEFA has additionally committed a $10m Project Support Facility (PSF) to be deployed at an early stage to structure bankable deals.

The total AfDB-mobilized package of $65m has provided a solid foundation for attracting capital from commercial and institutional investors to the renewable energy segment in Africa.

Alex Rugamba, Director of AfDB’s Energy, Environment and Climate Change Department, said: “AfDB is pleased to see that AREF is now fully capitalised to deliver on its pan-African mandate. We are also equally excited that SEFA and Global Environment Facility participation have been catalytic in mobilizing significant amounts of commercial capital into AREF over a short time-frame; this is key for accelerating deployment of modern, clean and affordable energy in the continent.”

AREF is the first dedicated sub-Saharan African renewable energy fund and is managed by Berkeley Energy, a fund manager focused on developing and investing in renewable energy projects in emerging markets.

The fund, which is headquartered in Nairobi, held its first close of $100m in March 2014 and since that time has been investing capital in grid-connected development stage renewable energy projects, including small hydro, wind, geothermal, solar and biomass projects.

Alastair Vere Nicoll, Berkeley Energy’s Partner and Co-Founder, said: “We are very pleased to have reached our target fund raising and look forward to continuing our work focusing on the technical delivery of our projects with our project partners from concept to generating reality."

The European Investment Bank (EIB) and the Global Energy Efficiency and Renewable Energy Fund (GEEREF), have contributed to the final close among other investors.

Pim van Ballekom, European Investment Bank Vice-President, said: “As one of the world’s largest investors in renewable energy, the European Investment Bank is committed to ensuring that new projects can be implemented around the world."

"This engagement is demonstrated through our support for the Global Energy Efficiency and Renewable Energy Fund, GEEREF. Our combined backing for the African Renewable Energy Fund will provide both financial support and share technical experience essential for smaller renewable schemes being implemented for the first time,” he said.

The final investor group also includes West African Development Bank (BOAD), ECOWAS Bank for Investment and Development (EBID), the Netherland Development Finance Company (FMO), Calvert Investments, the UK’s Development Finance Institution CDC Group, the Belgian Investment Company for Developing Countries (BIO), OeEB - the Development Bank of Austria, Wallace Global Fund, Sonen Capital, Berkeley Energy, African Biofuel and Renewable Energy Company (ABREC) and a number of other private investors.