Image Credits: Eric Roset/Africa Progress Panel.
The African Development Bank (AfDB) has announced that it has reached financial close on financing agreements for a $20 million concessional investment from the Sustainable Energy Fund for Africa (SEFA) for the Covid-19 Off-Grid Recovery Platform (CRP).
In a statement it released on Saturday, AfDB said the 5-year, $50 million blended finance initiative is designed to provide relief and recovery capital to energy access businesses, supporting them through and beyond the pandemic.
According to the multilateral finance institution, the concessional loan agreements were signed with fund managers Lion’s Head Global Partners, Triple Jump, and Social Investment Managers and Advisors, following approval by the Board of Directors of the African Development Bank in December 2020 for a $20 million concessional investment from the Sustainable Energy Fund for Africa (SEFA), to establish the platform.
“Lion’s Head is immensely grateful for the support from the AfDB, in particular the SEFA team and funders, for developing this innovative and catalytic co-investment instrument. African markets have been disproportionately affected by COVID-19 due to lack of infrastructure, macro vulnerabilities especially in terms of currency and credit shocks and increasing global protectionism,” said Harry Guinness, Managing Director of the Off-Grid Energy Access Fund, part of the wider Facility for Energy Inclusion.
“The COVID-19 Off-Grid Recovery Platform comes at a critical moment for early-stage energy access companies affected by COVID-19 and allows the Energy Entrepreneurs Growth Fund to continue releasing flexible capital into the sector at a time when risk capital is increasingly scarce”, said Jan-Henrik Kuhlmann, Head of Sustainable Energy at Triple Jump.
The Platform supports businesses commercializing solar home systems, green mini-grids, clean cooking, and other renewable energy access solutions in mitigating the impacts of the pandemic and ensuring a robust commercial recovery of the industry.
Asad Mahmood, CEO and Managing Partner of Social Investment Managers and Advisors, said: “Many small businesses have suffered seriously during the COVID-19 crisis. The African Development Bank’s relief efforts are market-driven and flexible and will help to leverage existing funds to ultimately assist energy distribution business in Africa.”
“The impact of the COVID-19 pandemic is jeopardizing the immense progress that has been achieved over the last decade in electrification through off-grid technologies across Africa. We are pleased that this initiative will increase resilience of the sector and look forward to working closely with our partners to safeguard energy access services and enable continued business expansion through and beyond the crisis,” said Joao Duarte Cunha, Division Manager for Renewable Energy at the African Development Bank.
Through this Platform and other renewable energy initiatives, the African Development Bank is committed to building a sustainable and more climate-resilient future by catalysing private investment in low carbon infrastructure as a means to create green jobs, diversify national energy sectors, accelerate green growth, and increase the climate resilience of rural communities.