Investment & Finance
AfDB releases a $50 million facility for energy access
The relief and recovery capital will support businesses in mitigating the impacts of the pandemic and ensure a robust commercial recovery of the industry.
Cape Town – A $50 million facility to support energy access companies in Africa has been established to support them from the affects of COVID-19. The African Development Bank (AfDB) approved $20 million in concessional investment from the Sustainable Energy Fund for Africa (SEFA) to establish the COVID-19 Off-Grid Recovery Platform (CRP).
This initiative underlines the AfDB’s commitment to the accelerated growth of Africa’s decentralized energy industry, based on renewables, as a key driver for universal energy access goalsDr. Kevin Kariuki VP for Power, Energy, Climate and Green Growth
The platform is anchored on a partnership with three specialized energy access fund managers selected through a competitive process: Triple Jump, Lion’s Head Global Partners, and Social Investment Managers and Advisors. The $20 million concessional envelope will be blended with their own capital and instruments, leveraging $30-$40 million in complementary commercial funding and enabling more affordable debt products. Through these partners, the recovery platform will support energy access companies commercializing and deploying solar home systems, green mini-grids, clean cooking and other decentralized renewable energy solutions, supporting them through and beyond the pandemic.
Energy access companies affected by COVID-19 to get support
The relief and recovery capital will support businesses in mitigating the impacts of the pandemic and ensure a robust commercial recovery of the industry. The move has been endorsed by leading industry associations, including the Alliance for Rural Electrification (ARE), Africa Mini-Grid Developers Association (AMDA) and the Global Off-Grid Lighting Association (GOGLA).
“The Bank’s new instrument is a game changer that will sustain and strengthen the African energy access sector. The platform’s innovative co-investment structure allows fund managers like Lion’s Head to focus on what we do best – mobilizing and deploying human and financial capital to unlock sustainable power for vulnerable communities while targeting critical post-pandemic issues such as local currency funding in a period of high uncertainty and volatility,” said Harry Guinness, Managing Director of the Off-Grid Energy Access Fund, part of the wider Facility for Energy Inclusion.
Joao Duarte Cunha, Division Manager for Renewable Energy at the African Development Bank, said the platform would fill a gap in the market. In addition to providing immediate relief and recovery support, the platform will lay the foundation for a green and inclusive economic recovery post-pandemic, he added.