Private financing arm of Agence Française de Développement Group (AFD Group), Proparco, has announced a $5 million (Sh 646.95 million) investment into the Equator Africa Fund through the FISEA+ facility.
This climate-focused investment fund aims to support early-stage African start-ups with innovative solutions to address climate challenges across sub-Saharan Africa.
In a press statement, Proparco said Equator invests in climate tech ventures that focus on three sectors crucial to Africa’s climate transition; energy, agriculture and mobility.
By supporting innovative solutions to ensure both environmental and economic sustainability, the financier added that Equator aims to tackle the significant challenges faced by sub-Saharan Africa, which has fast-growing populations and high vulnerability to climate change.
“As a first fund for the new management and with teams located in Nairobi and Lagos, Equator has established itself as a dedicated partner combining local insight with global expertise,” Proparco said.
Africa faces pressing climate challenges that threaten food security and economic stability, with projections indicating that 39 million Africans could face chronic hunger by 2050 due to climate-related impacts.
In this context, Proparco further noted that Equator focuses on supporting start-ups engaged in energy solutions like grid interconnections and renewable energy, sustainable agricultural practices, and innovations in electric mobility.
The investment qualifies for 40% to 60% climate co-benefits, and targets to align with Proparco’s strategic pillars of increasing access to economic opportunities and investing in climate initiatives, as affirmed in its 2023 to 2027 objectives.
Proparco’s investment via FISEA+ reflects its commitment to foster economic growth through environmentally sustainable initiatives.
Expressing his enthusiasm concerning the funding, Proparco head of the Venture Capital Division Fabrice Perez said through the investment, the financier aims to support ventures addressing the urgent climate challenges in Sub-Saharan Africa.
“Equator’s approach echoes our own commitment to driving sustainable development and climate resilience in the region,” he said.
“We believe these ventures hold promise for a sustainable future, enhancing both Africa’s economic strength and environmental resilience.”
On his part, Equator Managing Partner Nijhad Jamal noted that Proparco is uniquely positioned to provide expertise, networks and capital directly to Equator’s portfolio companies as they scale across the region.
“We are extremely proud to have Proparco participate in our fund and to join Equator’s mission to provide much-needed capital and active hands-on support to early-stage climate-tech ventures at a critical juncture in their start-up journey,” he said.
This new investment seeks to support climate-driven solutions in energy, agriculture, and mobility, allowing Equator to participate in efforts to bridge the gap in climate investment, by providing the resources needed to address Africa’s climate resilience while unlocking its vast economic potential.
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