New $55m financing to help African communities access renewable energy
A group of investors has approved new investments to support remote African communities gain access to renewable energy.
The African Development Bank (ADB) is the most recent to approve a $30-million investment towards the ‘Facility for Energy Inclusion Off-Grid Energy Access Fund’.
The Fund is a major initiative from the bank to enable financing for small-scale renewable energy projects. It is primarily designed to provide loans to off-grid energy companies, which can help households in remote communities gain access to clean electricity.
Additional investments came from Calvert Impact Capital ($10m), the Global Environment Facility ($8.5m) and the Nordic Development Fund (€6.5m).
The ADB estimates that 600 million people lack access to modern energy in Sub-Saharan Africa; the Fund will initially focus on East Africa as well as Côte d’Ivoire, Ghana and Nigeria.
The Fund is a major initiative towards advancing green financing on the continent, and the ADB is looking to create a strong pipeline of projects across the region. In total, it is aiming to support projects which will lead to the reduction of up to 8 million tonnes of CO2 emissions over its lifetime.
The financing is also part of the wider New Deal on Energy for Africa project, which aims to connect 75 million households with off-grid energy by 2025.
Astrid Manroth, Director at the African Development Bank, commented:
“(The Fund) is the first Bank instrument that enables debt financing…to off-grid energy access companies who need growth capital to expand their operations across Africa. The strong collaborations…and co-investments demonstrate the power of partnerships for clean energy access in Africa”.
Pasi Hellman, Managing Director of the Nordic Development Bank, said:
“Now we have a fully packaged investment vehicle to bring to market scaling up (of) proven clean off-grid energy solutions to the energy access challenge on the continent.”
Image Credit: Power Africa