Proparco supports the launch of the ATAF fund to accelerate climate infrastructure development in Africa

By committing capital at the fund’s first close, Proparco becomes one of ATAF’s early investors and supports the development of an innovative blended investment vehicle aimed at accelerating the deployment of clean infrastructure projects across the continent. The fund is anchored by catalytic capital from Allied Climate Partners (ACP), FSD Africa Investments (FSDAi), and the International Finance Corporation (IFC). 

The missing link in climate infrastructure financing in Africa

Africa faces a structural infrastructure financing gap estimated at nearly $100 billion per year, even as the clean technology market continues to expand rapidly. Estimated at $25 billion in 2024, this market could reach $200 billion by 2030.

However, many projects never move beyond the early stages of development. A number of barriers remain: regulatory frameworks sometimes insufficiently favorable, high development risks, limited institutional capacity, and difficulties in structuring bankable projects.

As a result, early-stage equity financing remains particularly scarce, even though it represents a critical step in transforming a project into a viable infrastructure asset. In Africa, private capital currently accounts for only about 14% of climate finance.

In this context, the private sector and development finance institutions have a key role to play in unlocking project development opportunities and catalyzing investment.

ATAF: accelerating Africa’s energy transition

The African Transition Acceleration Fund (ATAF) is specifically designed to address this funding gap by investing earlier in the infrastructure development cycle, where capital needs are most acute.

The fund will invest in equity or quasi-equity in around 14 infrastructure development companies or platforms, with ticket sizes ranging from $10 million to $30 million. These investments will support the development of project pipelines and accelerate the deployment of solutions related to the energy transition.

ATAF will primarily target three segments: clean electricity, decarbonized molecules and sustainable transport.

In terms of impact, ATAF aims in particular to reduce emissions and accelerate the transition to renewable energy; integrate climate adaptation considerations into investment decisions; create many direct and indirect jobs through its projects; and improve access to reliable and affordable energy, a key driver of economic competitiveness.

A fund backed by an experienced manager

ATAF draws on the expertise of African Infrastructure Investment Managers (AIIM), a specialist manager with more than 25 years of experience in pan-African infrastructure investment.

Historically focused on investments in projects at more advanced stages, AIIM is expanding its strategy to intervene earlier in the development cycle, where the main market bottlenecks currently lie.

The fund benefits from an innovative blended financing structure, including a junior equity tranche provided by leading investors: the philanthropic investment organization ACP, FSDAi, a development agency backed by the UK government, and IFC, the private sector investment arm of the World Bank Group. This is the second time that Proparco has invested in an early-stage climate-focused fund alongside Allied Climate Partners, and the first in Africa. ATAF’s blended finance structure, designed to reduce risk for investors, helps facilitate the mobilization of private capital for climate investment in Africa.

Proparco’s catalytic role in a structuring initiative

By supporting ATAF from the first close, Proparco aims to play a catalytic role in developing the climate infrastructure ecosystem in Africa and contributing to the structuring of a market segment that remains underfunded. 

“In Africa, one of the main obstacles to the energy transition remains the lack of capital available to develop projects at an early stage. By supporting ATAF from its first close, Proparco is helping to establish an instrument capable of addressing this gap and accelerating bankable climate infrastructure across the continent,” said Tibor Asboth, Head of Private Equity for Africa and the Middle East at Proparco.