FRONTIER ENERGY II BETA K-SStatus: Approved investment
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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
- FMO NV
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)