Swedfund Provides $20m to Boost Energy Finance for African Businesses

Swedfund, Sweden’s development finance institution, is providing a $20 million loan to Africa Go Green Fund to give more African energy businesses access to long-term debt.

The financing will support companies working to cut energy use and emissions, with projects spanning clean cooking, electric transport, green buildings, appliances and industrial energy efficiency.

The funding is significant because Africa Go Green lends to businesses that can find it difficult to secure long-term loans from commercial banks. The fund has already financed close to 30 projects in 17 African countries.

Africa Go Green was established by German development bank KfW and is managed by Cygnum Capital. Its financing is aimed at businesses whose projects can generate income and reduce energy costs but still struggle to obtain suitable loans from banks.

Financing businesses beyond power plants

The fund’s portfolio gives an idea of how the new financing can be used. Its projects include electric mobility, clean cooking and industrial energy solutions.

One recent deal provided a $10.7 million facility to BioLite to distribute at least 163,500 improved cookstoves in Zambia. The fund also took part in a $50 million debt package for Spiro, an electric motorcycle company.

Another $10 million from Africa Go Green supports the distribution of efficient cookstoves in Mozambique, Nigeria and the Democratic Republic of Congo.

These projects show that energy financing can cover products and services used by households, transport operators, factories and buildings. The fund is not focused on financing large power plants.

Instead, its loans can help companies buy equipment and expand distribution of products that use less energy or reduce emissions.

Swedfund said its investment is intended to increase the amount of capital available for projects that can lower energy use and operating costs.

The Swedish institution is investing alongside public and private investors as demand for power and transport rises across Africa.

New money builds on 2026 funding

Swedfund’s $20 million commitment comes after another major loan secured by Africa Go Green this year.

In January, German development finance institution DEG committed a €30 million loan to the fund. The new financing from Swedfund therefore comes as Africa Go Green builds its lending pool for energy businesses.

The fund’s model addresses a financing gap faced by companies that need long-term debt to buy equipment and expand their businesses.

For some firms, commercial banks may not offer loans for the length of time needed to develop such projects. Africa Go Green provides debt financing to businesses that have revenue-generating projects and can reduce energy costs.

Energy efficiency can also reduce the amount of new electricity generation needed as demand rises. For businesses and households, using less energy can also reduce operating costs.

The fund’s work therefore covers several parts of the energy market, from household cooking equipment to electric motorcycles and factory equipment.

Its financing also brings development and private investors into the same lending pool, allowing capital to be spread across different projects.

Swedfund’s new loan gives Africa Go Green more money to lend to companies working in these areas. The fund has already financed projects in 17 African countries, giving the new financing an existing portfolio through which its lending model is being applied.