Ikea, Rockefeller foundations to invest nearly half of $1 bn fund in Africa

 Ikea, Rockefeller foundations to invest nearly half of $1 bn fund in Africa

The platform aims to empower 1 billion people with distributed renewable energy. Photo credit: Ikea Foundation

The Ikea Foundation and The Rockefeller Foundation have created a $1 billion global platform to fight climate change and may deploy a part of it to third-party funds as a Limited Partner (LP) involved in the clean technology sector.

To facilitate the joint investment, The Rockefeller Foundation will incubate the platform in RF Catalytic Capital Inc. (RFCC), which the foundation launched in 2020. Both the foundations will pitch in with $500 million each.

The platform hopes to act as a catalyst to attract other co-investors and expects to raise funds from development finance institutions and others who might channel their money through RFCC or simply align their deals, a spokesperson for the Ikea Foundation told The Capital Quest.

It would look at various investment forms including equity and could potentially also involve becoming an LP in third-party funds dealing with energy transition and carbon reduction.

The spokesperson added that a bulk of the money will be split almost equally among least developed countries of Africa and South/Southeast Asia. A small portion will also be deployed in Latin America.

The platform aims to reduce 1 billion tons of greenhouse gas emissions and empower 1 billion people with distributed renewable energy or renewable energy generated from sources such as mini-grid and off-grid solutions, located near the point of use, rather than centralized sources like power plants.

“Our collective ambition is to create a platform that supports renewable energy programmes which can deliver greenhouse gas reductions fast and efficiently and accelerate the energy transition,” said Per Heggenes, CEO of the Ikea Foundation.

Rajiv J. Shah, president of The Rockefeller Foundation, said, “Our partnership will unlock the financing and resources that are essential to provide clean, reliable electricity that improves the lives and livelihoods of people everywhere.”

Vivek Sinha

The Capital Quest