Acre Impact Capital, an Africa-focused private-debt impact investment manager, marked the first close of its debut export finance fund to support climate-aligned infrastructure projects in the continent.
The London-headquartered investment firm raised $100 million as part of the first close of its Export Finance Fund 1. It secured commitments from a diverse group of investors, including institutional investors, major development finance institutions (DFIs), and family offices. It is about a third of the total target fund size of $300 million.
The first-of-its-kind investment vehicle aims to plug the critical financing gap for African climate-aligned infrastructure projects by providing a part of the unsecured funding for projects backed by export credit agencies (ECAs).
While commercial banks typically fund the tranche guaranteed by an ECA, which is about 85% of the project value, funding for the remaining 15% commercial debt tranche is often challenging. With the specialist funding for this tranche, Acre Impact Capital aims to mobilize private sector capital for such projects.
The fund aims to invest in 15-20 projects in four thematic areas including renewable power, health, food and water scarcity, sustainable cities, and green transportation. “These projects will deliver significant environmental and social impact while providing investors with desirable diversification,” said Hussein Sefian, CEO of Acre Impact Capital.
The fund’s key backers include the European Investment Bank and FSD Africa Investments. Rand Merchant Bank, one of Africa’s leading corporate and investment banks, and Standard Bank have also backed the fund. The fund has also secured significant commitments from several African investors and impact-first investors such as Trimtab Impact and Ceniarth.
According to the investment firm, the deployment from the fund will allow project sponsors to significantly reduce the cost of debt by obtaining attractive funding on ECA-backed financing and extending tenors up to 22 years.
“By providing specialist funding for the commercial debt tranche and as a result unlocking the ECA guaranteed part of the transaction, the fund will enable the mobilization of up to $2bln toward impact projects,” said Aymeric Perrin-Guinot, Senior Transactor ECA Finance at RMB London.
