Markets working to support sustainable development

Seed Capital Assistance Facility (SCAF)

SCAF was launched in 2008 by the United Nations Environment Fund (UNEP), the Asian Development Bank (ADB), the African Development Bank (AfDB) and the Global Environment Facility (GEF). It is an initiative designed to stimulate investment in sustainable energy by facilitating early-stage funding in clean energy enterprises. In doing so, it helps sustainable energy entrepreneurs and investors to overcome the challenges caused by high transaction costs and insufficient returns.

There are two types of cost-sharing support offered:

  • Enterprise Development Support - a grant given to the cooperating fund manager to elevate the elevated costs associated deal sourcing, providing enterprise development services and transacting seed sale investments. The terms of the arrangement detail that the fund manager must provide enterprise development services to entrepreneurs, including training, coaching and providing financial support.

  • Seed Capital Support - financial support that is specifically used to overcome the initial obstacles in project development costs, including technical assessments, contract negotiations and environmental impact assessments.

 

Market coverage: 

SCAF provides support and services to five partner funds from Asia and Africa.

Region

Partner Fund

Funds Available

Asia

Berkeley Energy Renewable Energy Asia Fund

SCAF provides the support of €1 for every €5 invested by the fund, of which there is an €86 million private equity fund.

Asia

Aloe Private Equity (APE)

With other partners (Aloe Environment Fund and the Green Investment Asia Sustainability Fund), APE has €174 million. SCAF will provide further support by financing certain activities, including independent technical assessments, risk analysis and cost reviews.  

Asia

Armstrong Asset Management

With access to a $65 million fund, they expect to seed finance four or five early stage projects or ventures - SCAF has promised to fund $1 for every $5 of seed capital invested by the fund.

Africa

Inspired Evolution Investment Management Evolution One Fund (IEIM)

The fund has a total of $90 million committed in capital, of which $5 million is focused on seed scale investments. SCAF helps finance IEIM’s development programmes.

Africa

Frontier Investment Management Frontier Market Energy Carbon Fund

In 2011, the fund had €60 million which it directed to financing renewable energy and establishing carbon credits. And, with SCAF’s support, it has €5 million to make seed scale debt and equity investments in early stage projects. In addition, SCAF is co-financing training, financial risk assessments and other soft costs.

 

Funding source: 

The donors are GEF and the UN Foundation.

Notable information: 

In total, the SCAF partner funds aim to finance more that $2 billion of clean energy infrastructure in the developing world, including $30 million at the early seed stage.

 

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