The African Development Bank (AfDB), and partners are facilitating small scale power projects to spread electricity to underserved population in Africa.
Under the arrangement, the AfDB, the European Commission, KfW, the Clean Technology Fund, Norfund, and other investors have committed nearly $160 million to the first close of the Facility for Energy Inclusion (FEI).
The FEI is a targeted $400 million fund aimed at improving energy access across Africa through small-scale renewable energy and mini-grid projects.
Spearheaded by the AfDB, the FEI serves as a financing platform to catalyze financial support for innovative energy access solutions.
The bank, as the Facility’s anchor sponsor, has put up $90 million in financing and the money includes $20 million that the Bank is providing in its capacity as the implementing agency of the Clean Technology Fund.
“After three years of hard work, we are pleased to see the second and larger piece of our energy access debt funding platform FEI up and running on the back of very significant commitments from our partners. We look forward to seeing FEI catalyse financing for new energy sector business models and accelerate our efforts to electrify Africa,” said Wale Shonibare, the bank’s Vice-President of power, energy, climate & green growth.
In addition to the Bank’s commitment, the European Commission committed €25 million to the Fund, the Norwegian Investment Fund (Nofund) committed $23 million, and German Development Bank KfW committed €25 million.
FEI will also include a $10 million Project Preparation Facility from the Global Environment Facility that will provide reimbursable grants for transaction advisory to facilitate financial close.
“Norfund is pleased to participate in this new facility which makes debt financing available to smaller-scale renewable power projects in Africa. We anticipate that the facility will be successful in attracting private capital to this segment of the market”, said Mark Davis, Executive Vice President, Clean Energy at Norfund.
“With our investment in this flagship fund, KfW on behalf of the German Government emphasises its commitment to work with other development finance institutions to improve access to clean energy in Africa. Our junior equity investment aims at mobilising public equity and private debt investors to scale up the financial means available for innovative renewable energy projects like new mini-grids to electrify Africa” said Babette Stein von Kamienski, Head of Division Infrastructure, Southern Africa at KfW.
The Facility supports small-scale Independent Power Producers delivering power to the grid, mini-grids and captive power projects.
Projects in sub-Saharan African countries where electricity access rates are comparatively lower would receive priority.
Source: Oriental News