Thanks to funds such as the Frontier Energy II Fund, more small and medium-sized renewable energy projects are expected to succeed, increasing the generating capacity of renewable energy sources.
The fund, which is managed by Frontier Investment Management in Denmark, operates on an integrated investment strategy. This means that the manager takes total responsibility for financing, project management, establishment, commissioning and quality assurance. This enables the fund to guarantee that each individual project – irrespective of size – is carried out in a business-like and sustainable way, in respect both to society and the environment.
The fund focuses particularly on investment in East Africa, including Kenya and Uganda. The aim is to become involved in projects at a relatively early stage. A fundamental requirement is that the projects are based on renewable energy which help reduce emissions of greenhouse gases, such as wind, hydro and solar power, as well as geothermal energy. A number of other detailed requirements are also set.
The investor base is expected to include institutional investors as well as development finance institutions, including Swedfund, which is investing the equivalent of SEK 118 million in the fund.
Facts Frontier Energy II Fund
Manager: Frontier Investment Management, Denmark
Start year: 2017
Life of fund: 10 years
Fund size: up to 175 MUSD
The fund's focus: Renewable energy project in Sub-Saharan Africa