The African Development Bank Group (AfDB), the Nordic Development Fund (NDF), the Global Environment Facility (GEF) and Calvert Impact Capital (CIC), are partnering to invest $55 million into off-grid energy.
The total amount is the sum of a $30 million investment in the Facility for Energy Inclusion Off-Grid Energy Access Fund (FEI OGEF) from AfDB, $10 million from CIC, $8.5 million from the GEF and €6 million from the NDF. The NDF will additionally provide a €0.5-million grant for technical assistance to support deal structuring and capacity development.
The FEI OGEF is a $100 million blended finance debt fund designed to provide loans in local and hard currencies to off-grid energy companies. The objective is to scale up access to clean electricity for off-grid households and crowding in local financial institutions as co-lenders.
The Fund directly supports AFDB’s New Deal on Energy for Africa and is part of its “High 5” priority to light up and power the continent. With a target to connect 75 million households through off-grid clean energy access solutions by 2025, the Fund is expected to result in the reduction up to 8 million tonnes of CO2 emissions over its lifetime.
This joint investment demonstrates the importance of partnerships for clean energy access in Africa and provides a strong signal to the interested investors, giving confidence and risk cushioning to attract early participation and additional investment by development finance institutions and other commercial investors.
The Fund is expected to facilitate the matching of local currency debt instruments with cutting-edge off-grid energy business models to scale up energy access for rural communities.
Managed by Lion’s Head Global Partners, the Fund will initially focus on East Africa as well as Côte d’Ivoire, Ghana and Nigeria, with the purpose to promote in a near future a strong network of investments in the region, where opportunities in green finance are growing rapidly.
The Facility for Energy Inclusion (FEI) is the AfDB’s flagship initiative for providing long-term finance to small-scale renewable energy access projects, of which FEI OGEF is one of the financing windows. FEI has been developed with grant support from the AfDB-hosted Sustainable Energy Fund for Africa (SEFA).
Source © Environews Nigeria