Development finance institution the African Development Bank (AfDB) has reached financial close on financing agreements for $20-million of concessional investment from the Sustainable Energy Fund for Africa (Sefa) for the Covid-19 Off-Grid Recovery Platform (CRP).
The five-year, $50-million CRP blended finance initiative is designed to provide relief and recovery capital to energy access businesses, supporting them through and beyond the pandemic, the bank said on August 15.
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 AfDB board of directors in December 2020 for a $20-million concessional investment from Sefa to establish the platform.
Sefa is an AfDB-managed special fund providing catalytic finance for renewable energy.
The CRP platform supports businesses commercialising 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.
“The impact of the Covid-19 pandemic is jeopardising 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 AfDB renewable energy division manager Joao Duarte Cunha.
Through this platform and other renewable energy initiatives, the AfDB 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.
“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 Triple Jump sustainable energy head Jan-Henrik Kuhlmann.
“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 owing to lack of infrastructure, macro vulnerabilities especially in terms of currency and credit shocks and increasing global protectionism,” said Off-Grid Energy Access Fund MD Harry Guinness.
“Many small businesses have suffered seriously during the Covid-19 crisis. The AfDB's relief efforts are market-driven and flexible and will help to leverage existing funds to ultimately assist energy distribution business in Africa,” said Social Investment Managers and Advisors CEO and managing partner Asad Mahmood.