IVORY COAST – The Board of Directors of the African Development Bank Group has approved a US$20 million concessional investment to support the second phase of the Covid-19 Off-Grid Recovery Platform (CRP).
The Group announced that the second phase will help create an additional US$70 million in funding for the energy access sector to cushion the pandemic’s persistent impacts on supply chains, inflation, the rising cost of capital, and the effects of the conflict in Ukraine.
It is Africa’s premier development finance institution comprising of three distinct entities namely the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF).
According to AfDB, the CRP is a blended finance initiative to unlock private capital for energy access companies to mitigate the negative impacts of the pandemic.
“Off-Grid Energy Access Fund is managed by Lion’s Head Global Partners, one of three fund managers which jointly anchored Phase I of the Covid-19 Off-Grid Recovery Platform. The other two are Triple Jump and Social Investment Managers and Advisors,” the Bank said.
The COVID-19 Off-Grid Recovery Platform is also aimed at advancing access to clean electricity and ensuring a green economic recovery.
“To date, over US$50 million in soft financing has been approved for 12 energy access companies that are commercializing and deploying solar home systems, mini-grids, and commercial and industrial solar irrigation solutions,” AfDB highlighted.
Through CRP partners, energy access firms can access a broad range of flexible debt financing solutions on more affordable terms.
“Thanks to this strong partnership, we have been able to mobilize over US$140 million of patient capital to mitigate the unprecedented challenges faced by the energy access industry,” the Group added.
AfDB further disclosed that the Sustainable Energy Fund for Africa (SEFA) will provide US$7 million in financing for the expansion while the remaining US$13 million will come from the Global Environment Facility (GEF).
Fund Lead of the Off-Grid Energy Access Fund Alix Graham underscored that the CRP is a partnership between the development and private sectors that offered innovative financing solutions without distorting the market or displacing private capital.
“With the SEFA concessional funding under CRP, the Off-Grid Energy Access Fund was able to offer affordable financing solutions in markets such as Malawi and Sierra Leone that helped companies to reduce the impact of increased currency volatility and rising logistics costs,” she added.
Deputy Head of Sustainable Energy at Triple Jump Mark van Doesburgh noted that the concessional funding provided under CRP phase II comes at a critical moment for early-stage energy access companies that continue to be affected by COVID-19.
He further said that the latest funding will allow the Energy Entrepreneurs Growth Fund to release flexible financing into the sector at a time when risk-capital is increasingly scarce.
“We appreciate the continuous support provided by the African Development Bank to accelerate progress towards SDG 7,” he added.
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