- Lightrock has reached final close on a $500 million fund for clean energy
- The firm is using the UN’s Sustainable Development Goal 7, which is affordable, reliable, sustainable and modern energy for all, as its investment thesis
- It has launched a new venture, Accelerate7, to deploy the capital in the emerging market
Lightrock has reached final close on a $500 million energy access fund, bringing its total assets to $5.8 billion.
The London-based firm, which spun out of LGT in 2021, will back growth stage companies across Sub Saharan Africa, South Asia, and Southeast Asia through a new platform named Accelerate7.
Accelerate7, sitting within Lightrock, will use the fresh funds to further the United Nations Sustainable Development Goal 7 (SDG 7), which is the affordable, reliable, sustainable and modern energy for all.
Over 660 million people globally don’t have access to electricity, while 2.1 billion rely on polluting or hazardous fuels for cooking. That’s the challenge that Accelerate7, which has boots on the ground in many of the markets it is targeting, hopes to meet.
The fund also has the potential to positively impact millions of people through social and economic co-benefits, according Demi Edosomwan, partner and head of energy access at Lightrock, will lead the effort.
“This work is also deeply personal to me. The majority of those without access to reliable energy and modern cooking fuels are in Africa, and energy poverty does not simply mean living without lights. It means poorer health outcomes, constrained livelihoods, and a disproportionate burden on women and girls, who are often most directly affected by collecting fuel, tending cooking facilities, and being exposed to hazardous fumes,” she tells Tech Funding News.
Accelerate7 has already cut four companies a cheque: SolarSquare, a rooftop solar system provider; Sun King, which is an off-grid solar energy company; electric vehicle manufacturer Euler Motors; and ATEC Global, an internet-of-things-enabled clean cookstove provider.
Edosomwan hopes it will help to catalyse further investment into a sector “that is fundamental to increasing prosperity and improving quality of life.”
It brings Lightrock’s energy transition, energy access and climate investment pots to $2 billion, representing a significant share of its assets. The firm also has an evolving emerging markets strategy, having just announced a $15 million commitment from development financier Proparco for its Latam Fund II.
Accelerate7 has a strong pipeline, Edosomwan says, and “the energy crisis has only underscored the need for proven solutions that can strengthen local resilience to energy shocks.”
The firm is “laser focused” on the exit routes for the companies it backs and maps them from the get-go. Edosomwan says it’s something they will continue to do while it has a stake in a company. She reckons that likely routes will include secondary sales and acquisitions by strategic acquirers. “In India, given the depth of the public markets, local listing also remains a possibility,” she adds.
Looking forward, Edosomwan has her eyes on the energy crisis, fuel disruption, supply chain pressure, input costs, and affordability for customers.
“The need for resilient, distributed, affordable energy solutions is very clear. However, the question is which businesses are best placed to grow through this environment and deliver both impact and strong returns,” she says.
