The news:
- E3 Capital and Lion's Head have hit $48 million in the first close of their E3 Low Carbon Economy Fund for Africa (E3LCEF).
- The fund's limited partners include Proparco, Dutch entrepreneurial development bank, and Swedfund International AB.
- The fund will provide initial and follow-on investments for climate tech startups such as solar energy providers and EV startups.
Africa's climate tech startups could see a significant increase in funding in the coming years as more funds target the sector.
In 2022, Satgana closed $32 million to invest in startups that focus on carbon removal. The International Development Finance Corporation (DFC) also invested $40 million in the Energy Entrepreneurs Growth Fund (EEGF) to increase access to off-grid energy in Africa.
The E3 Low Carbon Economy Fund for Africa (E3LCEF) now joins the list of funds that want to drive investment in African clean-tech startups.
The fund, which just hit its first close at $48.1 million, is managed by E3 Capital, an early-stage VC formerly known as Energy Access Ventures and Lion's Head Global Partners.
Per TechCrunch, the fund will provide initial and follow-on investment to startups that are supporting a low-carbon economy across sub-Saharan Africa.
Paras Patel, Founder and Managing Partner at E3 Capital, said, “African businesses are starting to emerge with clear product-market fit and a strong commercial potential at the core within the low carbon economy.
"We are passionate about helping African entrepreneurs build the next generation of innovative businesses that innovate, scale and impact the lives of all of us in the coming years,"
CEO of Lion's Head Global Partners, Clemens Calice said low-carbon startups in Africa are starting to see potential for substantial scale.
According to the United Nations (UN), Africa is only responsible for 2-3% of carbon emissions globally. This leaves a question of why VCs and the climate tech startups they fund are interested in reducing Africa's carbon footprint.
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