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Finnfund, a Finnish development financier and impact investor, has announced a $20 million commitment to Evolution III Fund, a Pan-African equity fund aiming to foster the availability and accessibility of clean energy and increase energy efficiency.

Finnfund, in a statement sent to Financial Nigeria, said its commitment is part of the first closing of the fund, managed by Inspired Evolution Managers Limited, a Pan-African climate-centred private equity firm specialising in clean energy infrastructure and energy and resource-efficiency growth investments.

“Our investment in Evolution III Fund marks our commitment to enhancing the production and availability of clean energy across the African continent as well as fight against climate change,” said Riikka Molander, Associate Director & Head of Funds at Finnfund. “This investment builds on several Finnfund’s strategic goals, such as making EUR 1 billion worth of new investment in climate finance by 2030 as well as maintaining our investment portfolio carbon net negative.”

Evolution III closed at $199.4 million in conditional commitments from seven international investors, including several development finance institutions, allowing a further 12–18 months window to reach its target close of $400 million in capital commitments. The Fund will target around 10 to 15 investments over an investment period of five years.

Inspired Evolution has been involved in financing the development and operations of more than 2 GW of renewable energy infrastructure-type generation projects and multiple growth equity investments across Sub-Saharan Africa since 2007, according to the statement. The firm focuses on key climate-driven principal investment themes, namely clean energy infrastructure, energy access, energy and resource efficiency, and the value chains that support them.

In Africa, access to reliable and clean electricity remains far behind most other parts of the world. With electrification rate of 46%, 590 million people are still without access to electricity in Sub-Saharan Africa. This situation reinforces socio-economic inequalities and impedes progress from increasing.

Africa has tremendous solar and wind potential and vast hydropower resources. The funding needed to facilitate Africa's energy transition to a net-zero energy mix by 2050 is estimated to be around $2.8 trillion. For Africa to achieve its climate action and energy SDGs (Sustainable Development Goals), its generation capacity must be doubled by 2030 and multiplied five-fold by 2050, Finnfund said.