Even though venture capital funding is decreasing worldwide, Africa’s climate tech business is heating up quickly. Last year, climate tech startups on the continent raised more than $860 million in equity funding, primarily for clean energy solutions. This is an astonishing rise of 3.5 times from 2021.
Climate tech is now Africa’s second most funded industry after banking, and this doesn’t look like it will change any time soon.
E3 Capital, which used to be called Energy Access Ventures, and Lion’s Head Global Partners, an investment bank that focuses on emerging markets, just announced that they had collected $48.1 million for the first close of their E3 Low Carbon Economy Fund for Africa (E3LCEF).).
The fund wants to raise $100 million and join the growing number of investment vehicles that help startups in Africa’s climate tech industry. The fund will give startups focusing on low-carbon economies, like solar companies and electric vehicle (EV) companies, money to start and keep going.
Vladimir Dugin, a partner at E3 Capital, said the new fund would put money into businesses all over sub-Saharan Africa. Most investments will be between $500,000 and $3 million.
Other critical climate-focused African funds include:
- Novastar’s $200 million Africa People + Planet Fund.
- Equator’s climate tech venture capital fund.
- AfricaGoGreen Fund (AAGF).
- Energy Entrepreneurs Growth Fund (EEGF).
Also, Oxfam Novib and Goodwell have set up a new fund to help startups in the climate tech industry get loans.