AfDB-sponsored off-grid energy access fund reaches final equity close

AFRICA – The Facility for Energy Inclusion’s Off-Grid Energy Access Fund (FEI OGEF) has reached final equity close with US$59m in committed equity capital and US$36m debt facilities, to support innovative, off-grid energy access companies

The final close was made possible through a US$15m equity contribution from the European Union (EU), and a further US$17m from KfW, acting on behalf of the German Federal Ministry of Economic Cooperation and Development (BMZ).

Additionally, the EU is providing US$2m 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.

The African Development Bank (AfDB) is the fund’s anchor sponsor with a US$30m contribution and US$8.5m from the Global Environment Facility (GEF).

Welcoming the EU and KfW contributions, Wale Shonibare, AfDB’s acting vice-president for power, energy, climate change and green growth, emphasised the strategic importance of FEI in delivering the AfDB’s renewable energy strategy for Africa, and the global SDG7 goal of energy access.

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.

FEI OGEF had its first close in November 2018 with committed capital of US$58m and has since closed a number of deals in the energy access space.

These include a US$8m local currency loan to BBOXX in Rwanda for the expansion of its solar home systems business and a US$2.5m inventory financing loan to SunCulture in Kenya, for the scaling up of its pay-as-you-go solar irrigation kits business to smallholder farmers.

The Fund is a co-sponsored initiative of the African Development Bank (AfDB) and NDF stemming from discussions dating back to 2016. Both AfDB and NDF provided small grant support to the preparation of the Fund, and both will provide anchor equity financing to mobilize the Fund’s first close.

FEI OGEF overall objectives are to scale-up access to affordable clean energy for off-grid households in Sub-Saharan Africa and facilitate a long term sustainable financing environment for off-grid energy access, with particular focus on mobilizing local currency financing and crowding-in local financial institutions (LFIs)

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