A specialised private-credit strategy financing the companies that create renewable energy assets in emerging markets
The SCAF III Debt Fund is an impact private debt fund providing corporate development loans to established renewable energy developers and independent power producers in emerging African and Asian markets. It addresses a specific and persistent financing gap in the renewable energy value chain: while substantial capital is available for the construction and operation of renewable energy assets, dedicated financing for the development of those assets remains scarce.
Investors and lenders typically enter once projects are substantially de-risked, leaving developers to finance the costs required to make projects investable in the first place.
The Fund will provide capital specifically for pre-financial close activities – such as feasibility studies, environmental and social impact assessments, grid work, permitting, engineering, legal and commercial structuring – enabling developers to advance multiple projects in parallel and build a larger pipeline of bankable renewable energy assets.
We are excited to announce the EUR 21.5 million commitment made by the Mitigation Action Facility (MAF) which will be supporting the SCAF III Debt Fund as an anchor investor!
The strategy builds on more than 15 years of experience supporting renewable energy development under the SCAF I and II (repayable) grant facilities through which we have supported more than 150 renewable energy projects in 36 countries across Africa and Asia, gathered valuable markets insights, and built a substantial network of (now) established project developers, i.e. potential investees of the Fund.
The SCAF III Debt Fund is a strategic evolution of the SCAF II Grant Facility, designed to meet shifting market needs and investment opportunities. As markets and developer ecosystem have matured, the appropriate financing instrument has evolved. While smaller developers in higher-risk markets may still require grants, established developers in comparatively mature markets increasingly have the capacity to absorb debt.
The Fund will be set up as a blended finance structure, with the Mitigation Action Facility providing a EUR 21.5 million (~USD 25 million) first-loss junior piece. Target size is USD 100 million, with a first close envisaged at roughly USD 50 million. We are currently fundraising for the Fund’s mezzanine and senior tranches.
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