Novastar secures GCF investment for $200M Africa Climate Fund

GCF commits up to $40M to Fund III targeting climate tech across key African markets

The Green Climate Fund (GCF) has approved an equity investment of up to $40 million in Novastar Ventures’ Africa People and Planet Fund III, a $200 million venture vehicle focused on early and growth-stage climate solutions in key African markets. The GCF commitment will act as an anchor investment to mobilize additional private capital for the region’s climate innovation ecosystem.

Founded in 2014, Novastar Ventures manages more than $200 million across impact-focused funds targeting African markets. The firm invests in entrepreneurs developing scalable solutions in essential services and sustainable infrastructure.

The GCF approval, registered as FP287, establishes a blended finance structure combining public climate funding with private capital. The approach seeks to balance financial and environmental outcomes through equity investments in companies advancing both mitigation and adaptation goals. By absorbing early-stage risk, the GCF allocation is designed to enhance the fund’s overall risk-return profile and attract commercial investors.

Fund III will invest in technologies and business models that address climate resilience, decarbonization, and resource management across Kenya, Nigeria, Rwanda, South Africa, and Egypt. Target sectors include clean energy, resource efficiency, climate-smart agriculture, and enabling digital infrastructure.

Participation is expected from development finance institutions and corporate investors. British International Investment and Japanese institutional partners, including the Japan International Cooperation Agency (JICA), have indicated alignment with the fund’s strategy and climate objectives.

Africa continues to face a shortage of funding for early- and growth-stage ventures addressing climate challenges. The GCF investment is expected to catalyze additional private sector participation and strengthen confidence in the continent’s venture-stage climate innovation.

Novastar plans to take minority positions in portfolio companies, contributing to governance, value creation, and measurable impact tracking. Expected outcomes include emissions reductions, improved climate adaptation capacity for communities and enterprises, and expanded employment opportunities.

With the GCF commitment secured, Novastar Ventures aims to advance fundraising toward full deployment of Fund III. The vehicle’s blended structure and focus on climate resilience position it to attract both institutional and mission-aligned investors seeking scalable solutions in emerging markets.