Proparco Backs Novastar Fund III with $5M to Drive Africa’s Green Transition

Oliver Game (Proparco's East Africa PE & VC Lead) and Andrew Carruthers (Novastar Ventures Co-Founder & Managing Partner)

Proparco has invested $5 million in Novastar Ventures’ Africa People and Planet Fund III, which has reached a final close of $147 million.

The fund targets companies that improve access to essential goods and services for everyday consumers, producers, and employees, while generating significant environmental impact — notably by reducing and avoiding greenhouse gas emissions, improving soil health, and enhancing biodiversity.

“At Proparco, we believe that venture capital is a vital tool for driving the green transition in Africa. Our $5 million commitment to Novastar’s latest fund reflects our confidence in their ability to identify and scale tech-enabled solutions for the continent’s most pressing challenges. We are excited to support founders who are building a more inclusive and climate-resilient future for millions of people across Africa,” said Oliver Game, PE and VC lead at Proparco’s regional office for East Africa.

What Does the $147M Fund III Target?

Novastar’s Fund III is structured to back companies that deliver dual impact: commercial returns and measurable environmental outcomes.

Core Investment Focus Areas

• Access to essential goods and services for underserved populations
• Climate mitigation and adaptation solutions
• Agricultural innovation improving soil health and productivity
• Biodiversity preservation and restoration technologies
• Workforce-enabling platforms supporting inclusive economic growth

These sectors are critical, particularly as over 600 million people in Africa still lack access to reliable infrastructure and essential services.

How Does Fund III Deliver Environmental Impact?

The fund prioritizes startups that generate quantifiable environmental benefits. Key impact pathways include:

Impact Area	Target Outcome	Relevance (2025–2030 Outlook)
Greenhouse Gas Reduction	Lower CO₂ emissions via clean tech adoption	Africa emissions expected to rise 30% by 2030
Soil Health Improvement	Regenerative agriculture practices	65% of Africa’s farmland degraded (FAO)
Biodiversity Enhancement	Ecosystem restoration and conservation tech	أفريقيا hosts 25% of global biodiversity
Climate Resilience	Adaptation tools for vulnerable communities	700M Africans at climate risk by 2030

This positions the fund within a rapidly growing $3 trillion global climate finance market (projected by 2030).

This investment is made under the EU-backed Choose Africa VC programme with support from the European Union and the European Fund for Sustainable Development Plus (EFSD+).

What Does This Mean for Founders and Investors?

For founders, this signals increased access to early- and growth-stage capital in sectors that directly impact livelihoods and climate resilience.

For investors, it highlights:

• Strong pipeline of impact-driven, scalable startups
• Growing LP appetite for Africa-focused funds
• Increased co-investment opportunities with DFIs and EU-backed vehicles

Ultimately, Fund III reinforces Africa’s positioning as a frontier market for climate innovation and inclusive growth, with venture capital acting as a key enabler.

 

 

FAQ

1. What is Novastar Ventures Fund III?
Novastar’s Fund III is a $147 million venture fund targeting African startups that deliver both financial returns and environmental impact, focusing on climate, agriculture, and essential services.

2. Why did Proparco invest in this fund?
Proparco invested $5 million to support scalable, tech-enabled solutions addressing climate challenges and economic inclusion across Africa.

3. What sectors does the fund focus on?
The fund invests in climate-tech, agri-tech, essential services, and workforce platforms that improve access and sustainability outcomes.

4. What is the Choose Africa VC programme?
It is an EU-backed initiative that mobilizes billions in funding to support African startups and SMEs through blended finance mechanisms.

5. Why is this investment important for Africa?
It strengthens access to venture capital, accelerates climate innovation, and supports inclusive economic growth across underserved markets.

Source: Africa Private Equity News