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In brief: Mirova’s Climate Fund for Nature grows to €195m at second close

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Published: 15 March 2024

Plus, Swedfund puts €15m into XSML Capital’s African Rivers Fund IV | Climate Fund Managers and Microsoft’s Climate Innovation Fund back platform to supply renewables-derived grid-power to Nigerian users.

The Climate Fund for Nature seeks to restore forests, including mangroves | Timothy K on Unsplash

Fund manager Mirova has announced the second close of the Climate Fund for Nature at more than €195m, bolstered by commitments from CapGemini, Unibail-Rodamco-Westfield and Groupe Mane.

The fund was launched at the UN COP 15 biodiversity summit in December 2022 and launched in February 2023. The long-term aim is to attract €300m of capital to back projects that protect and restore nature in emerging markets, and support farmers to transition to regenerative agriculture. It also seeks to generate carbon credits and benefit local communities, with a focus on making women more independent.

The new investors join the fund’s existing partners, which include Kering and the L’Occitane Group. Mirova hopes to bring in further investment from firms in sectors such as luxury goods, beauty, services, communications, agri-food. 

Mirova, which is part of Natixis Investment Managers, says the group of investor reflects a growing interest from major companies in investing in nature-based solutions, as well as meeting their decarbonization targets. 

“Their commitment is a positive signal about the role that large corporations can play in mobilizing funding for nature,” said Gautier Quéru, Mirova’s managing director, natural capital, said.

Most projects backed by the fund will involve afforestation, reforestation, mangrove restoration, natural regeneration, regenerative agriculture and agroforestry, according to Mirova. Investments made already include one to support a project protecting primary forests in Peru, in partnership with a local NGO and indigenous communities. 

Separately, the fund manager has also launched a strategy to support the growth of unlisted European companies contributing to societal improvements, aiming raise €200m from European investors.

Swedfund invests €15m in XSML fund for Central and East Africa 

Swedfund, Sweden’s development finance institution, says it has invested $15m (€13.7m) in the African Rivers Fund IV, a credit fund managed by XSML Capital, which supports companies in Central and East Africa, including the Democratic Republic of Congo, Angola, and Zambia.

The fund, which has announced a first close of $98.7m, seeks to increase access to long-term financing for small and medium-sized enterprises (SMEs) and improve support for sustainable private sector growth, boosting employment and income generation, and improving women’s economic empowerment. 

Swedfund said its investment is also expected to increase local tax generation and support workforce skill development in critical sectors, such as  healthcare and logistics, as well as manufacturing.

The Swedish DFI previously invested in XSML’s third fund, African Rivers Fund III, in 2020, and made an additional investment in 2022. 

Swedfund makes 65% of its investments in sub-Saharan Africa and has traditionally had a focus on East Africa. It is now seeking to invest more in West Africa, opening a regional office in Cote D’Ivoire in 2023 and making its first investment in that region in February 2024.  

Other investors in the African Rivers Fund IV include British International Investment (BII), Dutch development finance institution FMO, the International Finance Corporation (IFC), Norway’s Norfund and the Swiss Investment Fund for Emerging Markets (SIFEM).

CFM and Microsoft support renewable energy platform in Nigeria

Financial close has been reached for an $18m investment by Climate Fund Managers (CFM) and Microsoft’s Climate Innovation Fund in UK-based Konexa to establish a private renewable electricity trading platform in Nigeria. The platform’s first client is  Nigeria Breweries, two of whose facilities are being connected to the grid, with supply sourced entirely from renewable energy.

CFM invested in the project through its Climate Investor One (CIO) fund, an EU-supported blended finance facility to develop renewable energy infrastructure in emerging markets. CFM is a joint venture between FMO and Sanlam InfraWorks that also invested in Scatec’s Africa-focused renewables firm Release in mid-2023.

Konexa is one of several firms to be awarded a private energy trading license in Nigeria, as part of the country drive to find a solution to its long-running power supply crisis, which has left many users reliant on costly off-grid electricity from fossil fuel-powered generators. 

The license, awarded in June 2022, permits Konexa to source renewable power from independent power projects, feed it into the national grid and sell it to private customers. Power sales will be handled by the new electricity trading platform, which is intended to improve energy supply reliability and sustainability for off-takers, as well as making the national grid more efficient and resilient.

The breweries, located in Kaduna, will derive their power from the 30-megawatt Gurara Hydro Power Plant, also in Kaduna state. Both are currently not connected to the grid and powered by fossil fuels. The investment will also support the building of facilities and the installation of battery storage to complement grid supply. Konexa estimates the project will avoid emissions of around 8,100 tons of CO2-equivalent a year, comparable to the impact of taking 1,800 cars off the road.

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