Project detail - Evolution III LP

Who is our customer

Evolution III Fund (EVIII) is a pan-Africa private equity fund focused on investments in renewable and sustainable energy infrastructure, energy access, and energy and resource efficiency solutions that forge climate-resilient development pathways for Africa’s future. EVIII has a target fund size of USD 400m and is advised by Inspired Evolution Investment Management (IEIM). Established in 2007, IEIM is a South Africa based climate impact fund investment advisor that has proven regional development and investment experience in the clean energy, energy and resource efficiency space.

What is our funding objective?

EVIII will focus predominantly on private finance for the mitigation of climate change and energy transition. The Fund plans to make 10-15 investments of control or significant influence in pan-African assets with core infrastructure and/or growth characteristics, including but not limited to (i) renewable energy generation (utility-scale grid-connected, commercial & industrial solar and mini/micro grids), (ii) energy access (distributed generation, off-grid solutions), and (iii) energy and resource efficiency low-carbon growth capital investments across key climate-impact sectors in Africa located largely within sectors that make up the food-energy-water nexus (e.g. energy efficiency for smart cities, digital infrastructure, e-mobility/e-logistics).

Why do we fund this investment?

By investing in the EVIII, FMO seeks to address the market need for energy in Africa in a sustainable and responsible manner, by increasing the production of clean energy and investing in energy and resource efficiency projects. EVIII gets FMO Green Label, and as such supports our ambition to have an investment portfolio aligned with a 1.5º pathway and contributes to SDG13 (Climate Action). FMO will also play an anchor investor role in EVIII. A successful final closing of the fund means that more risk capital is available for renewable energy and clean technologies in Africa, which is fully in line with FMO's investment strategy.

What is the Environmental and Social categorization rationale?

E&S risk is considered High (Cat. A) based on the fund’s investment strategy and E&S risk profile and size of targeted investments. The pipeline shows several A or B+ investments, in large-scale wind and solar, as well as potentially in hydropower, waste recycling and biomass, triggering potentially PS 2-8 exposure or impacts. The Fund Manager has a dedicated E&S capacity and an ESG Management System that will be further strengthened for EVIII. FMO and other DFIs have prepared an environmental and social action plan and will continue to monitor the E&S performance and E&S capacity within the team to ensure that the Fund Manager remains adequately equipped to invest in these sectors throughout the Fund's life.