African Development Bank sponsored Off-Grid Energy Access Fund reaches final equity close with partner contributions
The
Facility for Energy Inclusion’s Off-Grid Energy Access Fund (FEI OGEF) has
reached a final equity close with $59 million in committed equity capital and
$36 million debt facilities, to support innovative, off-grid energy access
companies.
The
final close, reached on 18 November 2019, was made possible through a $15
million equity contribution from the European Union (EU), and a further $17
million from KfW, acting on behalf of the German Federal Ministry of Economic
Cooperation and Development (BMZ). Additionally, the EU is providing $2
million to fund a technical assistance facility, to enhance local currency
financing. Other OGEF equity investors include the Nordic Development Fund and
All On Calvert Impact Capital and the Prudential Insurance Company of America.
OGEF
expects to raise further debt towards its $130 million target over the next
12-18 months.
The
African Development Bank is the fund’s anchor sponsor with a $30 million
contribution, and $8.5 million from the Global Environment Facility (GEF).
Welcoming
the EU and KfW contributions, Wale Shonibare, the Bank’s acting Vice-President
for Power, Energy, Climate Change and Green Growth, emphasized the strategic
importance of FEI in delivering the Bank’s renewable energy strategy for
Africa, and the global SDG7 goal of energy access. “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,” he said.
Modern,
high-quality off-grid connections can transform lives, Babette Stein von
Kamienski, KfW’s Director of Power and Energy in Southern Africa, noted.
“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,” she said
Originally
supported by a grant from the Sustainable Energy Fund for Africa (SEFA), FEI
OGEF is currently managed by Lion’s Head Global Partners.
“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. The off-grid market potential is massive and on
track to transform electricity access in Africa as we know it,” said Harry
Guinness, Fund Manager of OGEF.
FEI
OGEF had its first close in November 2018 with committed capital of $58 million
and has since closed a number of deals in the energy access space. 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.
Source
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