Mirova, the affiliate of Natixis Investment Managers dedicated to sustainable investment, supported by Mirova SunFunder East Africa Ltd as Investment Advisor, a wholly-owned subsidiary based in Nairobi, announced today the Gigaton strategy[1] has raised USD 171 million for its first closing. This blended finance debt strategy aims to accelerate the clean energy transition in emerging countries in Africa and Asia Pacific predominantly, as well as Latin America and the Middle East. Mirova SunFunder is a leading impact investor, solving energy access and climate change challenges in frontier markets, primarily Africa, by providing clean energy financing.
The strategy’s target size is USD 500 million and expects to deploy USD 1.2 billion of private debt throughout its life primarily to small and medium-sized enterprises (SMEs) in solar home systems, agri-solar, commercial & industrial solar, telecom tower solarization, mini-grids and other promising sectors such as e-mobility, battery storage, climate-smart food systems, energy efficiency and carbon credit pre-financing. With a sustainable investment objective[2], the strategy aims to impact peoples’ lives by offsetting CO2 emissions (SDG 7, SDG 13), creating jobs (SDG 8), advancing gender equality (SDG 5) and improving energy access (SDG 7, SDG 8, SDG 5)[3].
Long-standing partners such as U.S. International Development Finance Corporation (DFC), Swedfund and Sida as well as new investors will provide the catalytic capital and guarantee that help decrease risks and consequently unlock private capital. Natixis Private Equity also invested in the strategy to further mobilize private investors, combining investors’ resources to truly scale clean-energy investments, with robust social, gender and economic impacts. The strategy already constituted a pipeline of investments in over 30 countries and continues to actively seek new investable opportunities that further the efforts to build a sustainable and low carbon future.
Today, more than 770 million people lack energy access in the world – mostly in Africa and developing Asia [4]– regions with populations that are also the most vulnerable to the global climate crisis. Addressing climate change requires a reallocation of capital to decarbonizing global economies, particularly a clean energy transition in emerging markets. The Gigaton strategy will provide medium-long debt financing for clean energy projects and companies, accelerating the transition to a low-carbon economy and improving energy access in Africa, Asia Pacific & Latin America. We are grateful for all of the Gigaton strategy investors for their support and partnership.
Ryan Levinson , Mirova SunFunder's CEO and Head of Emerging Market Energy Transition
As a mission-driven, global responsible investor, we are aware that a large portion of the rise in global power demand will be driven by expanding non-OECD economies. As we have seen growing interest from investors for long-term investments in tangible assets and attractive yield potential, we are confident that the Gigaton strategy constitutes an interesting opportunity to finance the energy transition around the globe, relying notably on Mirova SunFunder’s expertise and know-how in emerging markets.
Raphaël Lance, Mirova's Head of Energy Transition Funds
See the press release for further detail and notes.
Major risks: The strategy may be exposed to market, credit, volatility, liquidity, counterparty, operational and sustainability risks, along with political and other macro risks, delayed settlement, criminality, default & insolvency and legal risks associated with emerging countries.
[1] The Gigaton strategy is structured in the form of a SICAV RAIF (Société d’Investissement à Capital Variable, Reserved Alternative Investment Fund) under Luxembourg law, open to subscription to eligible investors as defined in the regulatory documents. Mirova is the management company and Mirova SunFunder East Africa Ltd acts as Investment Advisor to Mirova. The supervisory authority approval is not required for this strategy.
The investment in this strategy is exposed to risk of capital loss. The strategy regulation is the source of information as it contains important information about its investment objectives, its strategies to achieve those objectives, and the main risks associated with any investment in that strategy. It also contains information on fees and commissions, and other fees of the strategy.
The information presented above is neither a contractual document nor intended to be an investment advice to subscribe in the strategy, nor it is Mirova’s commitment to structure and implement the strategy, or any other vehicle. Access to the products presented here may be restricted to some persons or in some countries.
[2] The Sustainable Finance Disclosure Reporting (SFDR) Regulation aims to provide more transparency in terms of environmental and social responsibility in financial markets, through the provision of sustainability information on financial products (integration of risks and negative sustainability impacts). Products classified as Article 9 within the meaning of SFDR have a sustainable investment objective compared to products classified as Article 6 (no sustainability objective) or Article 8 (environmental and social characteristics).More information on Mirova’s website
[3] Sustainable Development Goal as defined by the United Nations. More info on www.sdgs.un.org/goals.
[4] IEA, World Energy Outlook 2021.