Spark+ Africa Fund Seeks To Support The Growth Of Nigerian LPG Companies

By Samuel Adelowokan ــ Last Update 24 July 2023

Spark+ is a $64 million impact fund financing companies which enable African consumers to adopt LPG and other clean cooking fuels.

Clean cooking is not the first subject that comes to mind when talking about climate, environmental sustainability, or health. But here are some surprising figures: over 50 per cent of the loss of African forests is due to firewood and charcoal production for cooking. The carbon footprint from cooking in developing countries is equivalent to that of the aviation industry. There are more premature deaths caused by indoor air pollution in developing countries each year than from malaria, HIV and tuberculosis combined.

Of course, where problems exist, savvy entrepreneurs see opportunities. Innovative business models and technologies are rapidly being established across African markets to make clean and modern cooking solutions affordable for more people across the Continent and beyond.

Spark+ Africa Fund is hailed as the first impact investment fund specialized in clean and modern cooking energy in developing markets. An innovative partnership of 16 public and private sector investors, backers of the fund include development finance institutions (DFIs), foundations, family offices, and pension funds. Since its launch in March 2022, Spark+ has disbursed six investments in East, Central and Southern Africa, and is now seeking opportunities in the LPG industry in Nigeria, Ghana, and other West African markets.

Spark+ engages via a mix of financial instruments, from short-term senior secured debt to long-term quasi-equity capital, all with the aim of accelerating the growth of companies across the value chains several cooking fuels including LPG. It invests in product designers and manufacturers as well as distributors and financing intermediaries that offer credit to end users to make products more affordable. Ticket sizes range from $500,000 to $7 million, and the fund can extend both USD and local currency financing.

Spark+ is seeking investment opportunities across a range of LPG-related business models, including bulk storage, transport and logistics, cylinder manufacturing and refilling, as well as innovative models which leverage technology to enable LPG uptake e.g. those utilizing PAYG LPG cylinder meters or mobile money technology to enable fractional refilling at micro-refilling stations. The fund is also pursuing investments in companies which operate micro-distribution points for cylinder swapping and smartphone apps for home delivery.

More about Spark+ can be found on the fund’s website at www.sparkafricafund.com.