The financial services provider Apex Group has been appointed as the alternative investment fund manager and administrator for the Gaia Africa Climate Fund, which focuses on renewable energy infrastructure in sub-Saharan Africa. The fund is targeting up to $200m in assets and aims to catalyse private investment in utility-scale renewable energy projects across the continent.

The Gaia Africa Climate Fund, managed from Luxembourg, represents a significant step towards creating a secondary market for renewable energy developers and early-stage investors in Africa. By providing a platform for these stakeholders to offload or sell their equity holdings after the completion of project construction, the fund addresses a critical challenge in the region’s renewable energy sector, Apex in a press statement. This initiative is expected to reassure developers by ensuring that their capital is released once projects become operational and generate stable cash flows.

The fund is also expected to play a pivotal role in deepening private capital markets across Africa. It plans to raise $50m in its first round of funding by the end of 2024, attracting capital from institutional investors in Europe, the United States and Africa. The fund’s strategy aligns with the growing interest in sustainable investments, offering investors the opportunity to participate in the equity of established renewable energy projects in a region with significant growth potential.

Kavitha Ramachandran, chief operating officer at Apex Group Luxembourg, emphasised the importance of the partnership, noting that the collaboration with Gaia aligns with Apex Group’s sustainability goals. Ramachandran stated that expanding the pool of global investors in the African renewable energy market would be crucial in delivering essential infrastructure projects that support local economies and contribute to climate change mitigation.

Renier de Wit, managing director of Gaia Fund Managers, described the Gaia Africa Climate Fund as “highly catalytic,” highlighting its potential to drive ecosystem change in sub-Saharan Africa’s climate infrastructure development cycle. De Wit noted that by crowding in private capital for investment in operational assets, the fund would alter the investment landscape in the region. He also expressed confidence in Apex Group as a partner, citing its extensive experience and shared commitment to impact investing as key factors in their selection as AIFM and administrator for the fund.

The Gaia Africa Climate Fund was one of four funds selected in 2021 by the Luxembourg-based International Climate Finance Accelerator for its role in enhancing access to renewable energy as an asset class in Africa. The fund is classified as an article 9 fund under the EU’s sustainable finance disclosure regulation (SFDR) and is aligned with several United Nations sustainable development goals (SDGs), including affordable and clean energy (SDG7), climate action (SDG13), and industry, innovation and infrastructure (SDG9).