Status: Approved investment
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Why disclosure?

FMO is committed to making publicly available relevant investment information that informs stakeholders and enables them to engage directly with FMO on its investments which, in turn, enhances our investment decisions, the design and implementation of projects and policies, and strengthens development outcomes. Learn more

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The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.

Who is our customer

Frontier Investment Management is a Danish-based private equity fund investing in renewable energy assets in Sub-Saharan African markets, with a preference for Kenya, Uganda, Tanzania and Rwanda. The fund manager was supported by the Confederation of Danish Industry (DI) and have received a Seed Capital Assistance Facility (SCAF), funded by AfDB and UNEP, to develop investable projects.

What is our funding objective?

Frontier seeks investment opportunities in the development, construction and operation of renewable energy, targeting the provision of equity for construction typically from USD 5 million to USD 25 million per project. All investments must be related to specific energy projects and assets. The Fund has a medium to long term perspective on its investments with a typical investment horizon of 5 to 10 years.

Why do we fund this investment?

The Fund’s investment mandate is a good fit with FMO’s focus and strategy tackles the problem of a lack of investable renewable energy assets by becoming involved in a relatively early stage of development and devoting substantial time and resources to development stage assets. What is more, the team has built an extensive track record of developing renewable energy projects with their first fund, supported by a platform approach (cross-project teams organized by technology / country) with highly capable technical, commercial and ESG personnel both at Fund level and within the underlying platform teams.

What is the Environmental and Social categorization rationale?

The Fund is classified as cat A, just as the first fund was, but the number of cat A risk investments is expected to be limited. The investment focus continues to be on small-scale run-of-river hydropower projects and to a lesser extent on geothermal energy. The main potential impacts and risks to be mitigated and managed relate to community impacts and engagement, potential impacts on natural habitat and construction safety and worker conditions. Adequate professional E&S staffing is in place, as well as a good, functioning environmental and social management system, which has been set up and implemented with the support of development finance institutions and which is being updated for this second fund. Their first fund demonstrates a good E&S track record.

Effective date
Total FMO financing
USD 24.00 MLN
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk Environmental & Social Category
(A, B+, B or C)