AFRICA – Dutch development finance institution (FMO) has approved a US$15 million investment in the Metier Sustainable Capital Fund II, is a private equity fund investing in clean energy generating assets and resource efficiency projects and businesses across Africa.

The fund is managed by Metier and is expected to reach first close in 2019, having development finance institutions including FMO as anchor investors. Metier Sustainable Capital Fund II is the follow-on fund of the Lereko Metier Sustainable Capital Fund (LMSC).

The Metier Sustainable Capital Fund II targets investments which deliver social and environmental benefits as well financial returns.

The investment mandate is balanced between renewable energy projects (encompassing both grid-tied and distributed generation) and growth capital investment in other resource efficiency sectors such as water and waste, with a unique blend of team skills, experience and network allowing for a compelling proposition.

Compared to the predecessor LMSC, which invested mostly in on-grid renewable energy projects in South Africa, the Fund II will broaden its target sectors and geographic focus across the African continent.

By investing in the Metier Sustainable Capital Fund II, FMO seeks to address the market need for energy in Africa in a sustainable and responsible manner, by increasing the production of clean energy and investing in resource efficiency projects. 

FMO will play an anchor investor role in the Fund II. A successful final closing of the fund means that more risk capital is available for renewable energy and clean technologies in Africa, which is fully in line with FMO’s investment strategy.

Metier Sustainable Capital Fund II will actively contribute to sustainable development through clean energy and resource efficiency in low- and middle-income countries in Africa, that will also generate additional benefits for the local society (e.g. employment, CSR investments). 

The Fund’ current pipeline consists of pan Africa assets in renewable energy (incl. a mini-hydro platform, solar PV and biomass/waste water to energy plants) and resource efficiency. 

The Fund manages Environmental and Social risks and impacts through a mature and IFC PS-aligned ESMS, together with FMO and the other DFI partners who are actively engaged through an ESG committee. 

The Fund also has established proper ESG reporting procedures and will closely monitor and manage E&S risks and impacts to secure net positive results or proper compensation in line with Good International Industry Practices. 

Further, FMO will actively engage with the Fund in an effort to identify and materialize asset-specific value add opportunities, including CSR initiatives.