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The Africa Renewable Energy Fund (AREF) has raised US$100mn to invest in small and medium-sized power projects in sub-Saharan Africa
According to Reuters, African Development Bank (AfDB) is the lead investor for this fund, and has already contributed US$65mn. AREF will be managed by Berkeley Energy, which also handles the Renewable Energy Asia Fund (REAF).
AREF would invest funds ranging from US$10mn to US$30mn per project, and enable an option to seek more funds from other investors. Small hydroelectric power plants, wind, solar, geothermal and waste gas projects with capacities ranging 5MW to 50MW will be targeted, AREF officials stated.
Other fund contributors include the West African Development Bank, Ecowas Bank for Investment and Development, Dutch Development Fund FMO, Togo-based African Biofuel and Energy Company and Berkeley Energy.
Gabriel Negatu, regional director for the East Africa Resource Center in AfDB, said, "The whole idea is that this is supposed to catalyse and crowd in other investors, so I can assure you that in a few years time we may be looking at maybe US$1bn or half a billion dollars.”
Negatu added that AfDB is also in talks with Kenya and Uganda to understand how to develop crude oil refineries to harness oil.
Meanwhile, AREF also has plans to take controlling stake in 12 greenfield projects.