A boost for Africa’s climate drive: South Africa's Gaia Fund Managers is raising USD 200 mn for its Gaia Africa Climate Fund as it targets investments in renewable energy projects across sub-Saharan Africa, Bloomberg reports. The Luxembourg-based fund is set to be fully capitalized by the end of 2025 and aims to attract US and European investors with some of the investors pledging USD 50 mn this year, Managing Director Renier de Wit told Bloomberg. Gaia also plans to list investment vehicles on the Kenyan and Botswana stock exchanges to attract institutional and pension fund investors.

And that’s not all: British private equity firm Helios Investment Partners has raised an initial USD 200 mn for its Helios Climate, Energy Access, and Resilience Fund (CLEAR), bringing the fund closer to its USD 400 mn target, Reuters reports, citing a statement. The funds will support African companies in low carbon energy, climate smart agriculture and food, climate friendly mobility and logistics, recycling and resource efficiency, and digital and financial climate “enablers.” They came from the UK’s FCDO, European Investment Bank, British International Investment, Dutch Development Bank and the Swiss Investment Fund for Emerging Markets among others.

Why this matters: The funds will help address the significant energy access gap in Africa — where about half the population lacks electricity, according to Bloomberg. The continent has vast renewable energy resources that remain unutilized due to a lack of funding.

Britain raises renewables auction budget to GBP 1.5 bn: The UK’s new Labour government has increased its current annual renewable power auction budget by 50% to a record high GBP 1.5 bn (USD 1.9 bn), Reuters reports. A higher budget will pave the way for more projects to be selected and offered a minimum price of electricity. When the prices are lower than the minimum, the budget will compensate for the difference while producers pay back the difference when the prices go up. Around GBP 1.1 bn will be dedicated to offshore wind, with GBP 185 mn going to established technologies and GBP 270 mn channeled towards emerging technologies. The Labour government aims to decarbonize the electricity sector by 2030.

We knew this was coming: Britain’s renewables industry has been calling on the government to increase the renewable auction budget after the 2023 auction failed to incentivize new wind projects. The budget was first set at GBP 1 bn with analysts saying that they should be raised to GBP 1.5 bn.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

  • Solvay to curb EU reliance on Chinese rare earth metals: Belgian chemicals group Solvay is aiming to reduce Europe’s dependence on China’s critical minerals by providing its own metals for use in EV permanent magnets and wind turbines. The group said it will begin regular production in its La Rochelle plant in France in early 2025 in an attempt to meet 30% of Europe’s permanent magnet demand by 2030. Solvay is the only European firm with the industrial capacity for processing the materials at such a level. (Reuters)
  • Uber to add BYD EVs to global fleet: Uber Technologies has partnered with Chinese automaker BYD to introduce 100k EVs to its ride-hailing platform starting in Europe and Latin America. The agreeement aims to reduce EV ownership costs and accelerate adoption excluding the US due to high tariffs on Chinese EVs. (Statement)
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