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E3 Low Carbon Economy Fund I (“LCEF”)

Proparco

E3 Low Carbon Economy Fund I (“LCEF”)

Proparco

E3 Capital and Lion’s Head Global Partners (renamed Cygnum Capital Group) have announced a first close for the E3 Low Carbon Economy Fund (LCEF) for Africa at US$48.1 million this May, and seeks further financing to get to its final close of up to US$100 million within 12 months.

The highly-innovative fund is backed by KfW (in collaboration with BMZ, the German Ministry for Economic Cooperation and Development), FMO (the Dutch Entrepreneurial Development Bank), Swedfund International AB (the Swedish development finance institution), and Proparco – with a final close targeting investors that can support the innovative potential of vibrant African entrepreneurs, in the challenging but high-impact pioneering space of climate tech in Africa.

Project Details

LCEF focuses on innovative entrepreneurs that set up early-stage businesses offering low-carbon, decentralized and smart services across Sub Saharan Africa – thereby building on the pioneering strategy of its predecessor and FISEA investee Energy Access Ventures Fund (team now called E3).

E3 Capital and Lion’s Head combined forces to leverage their respective experience and footprint in Africa, from their home base in Kenya. They provide essential capital and other support to entrepreneurs in Africa at a stage that is too early for most investors, boosting innovative solutions to, for example, climate change and energy production.

E3’s first fund has been one of the very few forerunner investors in the energy access and climate space in Africa and has managed to fulfill its impact mandate, while anticipating fundamental market shifts (broadening its scope from solar home systems, to productive use, to C&I, and later metrogrids). Unlike any other initiative, E3 has been able to deploy investments in very early-stage companies and several in fragile states (e.g. Chad, DRC, Burkina Faso).

Anticipated Impact

LCEF has strong ambitions regarding impact, notably on the SDGs: SDG 7 (clean and affordable energy), SDG 8 (decent work and economic growth), SDG 9 (innovation and infrastructure), potentially SDG 11 (sustainable cities and communities) and SDG 13 (action to combat climate change and its impacts).

Furthermore the fund aims to:

  • Support at least 16 SMEs/early-stage businesses, mainly in the development of businesses that either provide direct access to renewable energy, or provide services that have a relation to energy, like e-mobility, connectivity and energy efficiency tools and services.
  • Create and sustain at least 1120 direct jobs.
  • Contribute to reduced CO2 emission.
  • Support investments and access to energy and related services in Fragile States in Africa.
  • Support the digital transformation in Africa and help create skilled jobs.
Support/Partnership Required

LCEF secured commitments from FMO, SwedFund and KFW, but much needs additional investors to get to its target scale of US$100 million to support entrepreneurs on a larger scale.