Posted on :Wednesday , 17th January 2018
Kenyan firms producing off-grid power will be able to acquire capital from a new Sh10.3 billion fund that is being set up by the African Development Bank (AfDB) and a group of international financial investors.
The Facility for Energy Inclusion Off-Grid Energy Access Fund (FEI OGEF), will provide local and hard currency loans to off-grid energy companies that specialize in producing clean electricity, focusing initially on West and East Africa.
“The fund will be managed by Lion’s Head Global Partners operating out of offices in Nairobi, Lagos and London, with an initial focus on East Africa as well as Ghana, Côte d’Ivoire, and Nigeria, and looking to build a strong pipeline of transactions throughout the region,” said the AfDB in a statement.
“The fund will unlock the financial sector and local currency participation in this growing green finance opportunity.”
AfDB added that the fund would provide for a mixed capital structure, by making an equity investment in projects thus providing an assurance to early investors such as development finance institutions and other commercial investors.
A Sh3 billion investment in the facility has been approved by the AFDB.
Sh5.5 billion has been so far raised from the consortium, with the FEI OGEF aiming to close out the full Sh10 billion financing by the end of March.
Other investors include non-profit investment firm Calvert Impact Capital (Sh1 billion), the Global Environment Facility (Sh850 million) and the Nordic Development Fund (Sh810 million).
There are an estimated 600 million people in sub-Saharan Africa who do not have access to electricity. The government aims for universal access by 2020.
Small power producers have been identified as key in closing the access gap, being a combination of both off-grid and small-scale producers who feed their power into the national grid.