AfDB's off-grid energy fund attracts $95 million investment
EU and others have invested $95 million in equity capital and loans to support AfDB's Off-Grid Energy Access Fund.
The European Union (EU) and KfW, the German development bank, are among investors that have committed $59 million in equity capital and $36 million debt facilities to support the Facility for Energy Inclusion’s (FEI) Off-Grid Energy Access Fund (OGEF).
The OGEF is the off-grid window of FEI – a $500 million debt financing platform spearheaded by African Development Bank (AfDB) to catalyze financial support for innovative energy access solutions. FEI was established to provide debt financing through two distinct windows, the off-grid and on-grid. The off-grid window provides consumer and corporate financing solutions to solar off-grid companies and the related ecosystem.
According to a statement released on Friday, the OGEF reached a final equity close on November 18, 2019, through a $15 million equity contribution from the EU and additional $17 million from KfW. The EU will also provide $2 million to fund a technical assistance facility, to enhance local currency financing.
FEI’s off-grid window reached a $58 million first close in August 2018, with contributions from the AfDB, the Nordic Development Fund, the Global Environment Facility, All On and Calvert Impact Capital, Prudential Insurance Company of America, Shell Foundation, USAID and the UK’s Department for International Development. According to AfDB, OGEF expects to raise further debt towards its $130 million target over the next 12-18 months.
“We are pleased to welcome the participation of like-minded partners in our shared ambition to promote access to modern, reliable and sustainable energy in Africa, and to enhance private sector participation in order deliver electricity to underserved communities in Africa,” said Wale Shonibare, AfDB’s acting Vice-President for Power, Energy, Climate Change and Green Growth.
Originally supported by a grant from the Sustainable Energy Fund for Africa (SEFA), a multi-donor trust fund established by the bank, FEI OGEF is currently managed by Lion’s Head Global Partners, a London-based investment bank.
“We are proud to have reached this milestone and excited to play a meaningful role in growing the sector and serve customers who are not currently served by traditional electricity grids,” said Harry Guinness, OGEF’s Fund Manager. “The off-grid market potential is massive and on track to transform electricity access in Africa as we know it.”
Since achieving its first close, the off-grid window has closed a number of deals in the energy access space. According to the bank, these include an $8 million local currency loan to BBOXX in Rwanda for the expansion of its solar home systems business and a $2.5 million inventory financing loan to SunCulture in Kenya, for the scaling up of its pay-as-you-go solar irrigation kits business to smallholder farmers.
“KfW and BMZ have invested in OGEF to support this collaborative effort to advance climate friendly off-grid energy in Africa, demonstrating that off-grid solutions can complement sustained grid electrification to accelerate electricity access to millions of Africans,” Babette Stein von Kamienski, KfW’s Director of Power and Energy in Southern Africa, noted.
It’s important to remember that global mobilization to rout climate change would provide a host of economic and ...
The company said it will build a 100 MW plant in Enugu and two 50 MW plants in Kaduna and Jigawa.
USAID said it will award a $4 million purse to multiple innovative, off-grid solar businesses working in Africa.
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