Africa is preparing to leap forward in its journey toward sustainability as Scalar International and Mergence Investment Managers Ltd. announce plans to raise up to $150 million for a fund aimed at decarbonising 30,000 buildings across the continent. The Africa Decarbonisation Fund will focus on supporting energy-efficient infrastructure, particularly in southern Africa, by investing in companies that provide on-site clean energy solutions and energy-saving technologies.
This fund represents a much-needed shift in how energy is produced and consumed within African commercial spaces. Small and medium-sized enterprises across the continent, especially in countries such as South Africa, Zambia, and Namibia, are currently burdened by high electricity costs and unreliable power supply. These businesses often depend on diesel generators as a backup, a costly and polluting solution. Scalar and Mergence intend to change this narrative by supporting the installation of solar energy systems, battery storage, and energy management technologies within buildings. The plan is to help building owners and businesses take control of their energy needs, while also contributing to the continent’s climate goals.
Semoli Mokhanoi, Chief Commercial Officer at Cape Town-based Mergence, shared that approximately 30% of the fund’s capital will be allocated to projects in South Africa. This is a strategic choice given the country’s advanced infrastructure, existing energy challenges, and large base of commercial and industrial buildings. For Mokhanoi and his team, the goal is clear—empower African enterprises to become part of the energy solution while reducing operational costs and carbon emissions. Clean energy infrastructure is not just an environmental imperative; it makes financial sense.
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Hubert Gutsa, Managing Director at Scalar International, emphasized that African businesses are currently paying a premium for energy by relying on outdated and inefficient technologies. Gutsa explained that this initiative aims to unlock new possibilities for SMEs by providing access to affordable and sustainable energy. Having run similar programs in the United States, Scalar brings valuable experience and insights into structuring viable energy projects for commercial users. Their African strategy will adapt these learnings to meet the specific needs of local businesses and communities.
The Africa Decarbonisation Fund I is expected to attract a diverse pool of investors. Around 80% of the capital will come from global climate funds and European development-finance institutions, with the remainder sourced from African organisations. The fund is in advanced discussions with the EU-Africa Global Gateway Investment Package, an initiative by the European Commission designed to mobilise €150 billion for investment across Africa. This alignment with major international climate financing platforms signals strong investor confidence in the fund’s potential to create real, measurable impact.
The fund has also gained the support of Luxembourg’s International Climate Finance Accelerator (ICFA), which is helping to shape the project and provide early-stage grant financing and working-capital loans. ICFA’s involvement strengthens the fund’s foundation, offering both credibility and access to a growing community of climate-focused investors and institutions.
While solar installations and battery systems are central to the fund’s goals, the ambition extends far beyond basic energy supply. The fund will also support the deployment of smart-grid systems, which allow buildings to monitor and manage energy use in real time, improving efficiency and lowering costs. In addition, there are plans to roll out electric vehicle charging stations at commercial buildings, making them ready for the growing transition to cleaner transportation across Africa.
This initiative could not come at a more critical time. As Africa urbanises, the demand for electricity continues to rise, while infrastructure often struggles to keep up. At the same time, countries across the continent have made strong commitments to climate action and sustainable development. However, these goals require practical solutions—and sufficient financing—to be realised. By focusing on existing commercial and industrial buildings, the Africa Decarbonisation Fund I offers a tangible and scalable way to cut emissions and increase energy independence.
The economic benefits of this project are just as significant as the environmental ones. Reducing energy costs, creating green jobs, and enabling access to modern energy technologies can help African businesses become more competitive globally. It also opens new pathways for African entrepreneurs to enter the clean energy space, whether through installation, maintenance, training, or software development.
The model being proposed is one of local empowerment supported by global collaboration. Scalar and Mergence are not just investing in hardware—they are investing in long-term capacity building, resilience, and self-reliance. Their approach could become a blueprint for how private capital, international development partners, and African expertise can come together to build a more sustainable continent.
From office parks in Johannesburg to warehouse facilities in Lusaka, the transformation of 30,000 buildings will mean cleaner air, lower energy bills, and stronger infrastructure. But perhaps most importantly, it will send a message that Africa is not just adapting to the energy transition—it is actively shaping it.
This fund offers a timely reminder that the green economy is not a distant goal but an opportunity waiting to be unlocked—one building at a time.
