The African Development Bank (AfDB); Nordic Development Fund; Global Environment Facility; Calvert Impact Capital; and All On, have committed to provide capital worth $58 million to the Off-Grid Energy Access Fund (OGEF) of the AfDB, a statement form the bank has disclosed.
The statement which OGN obtained indicated this was achieved on Thursday, 2 August 2018. It explained the fund is part of the bank’s sponsored Facility for Energy Inclusion (FEI) – a $500 million debt platform to catalyse capital markets support for innovative energy access strategies.
According to it, OGEF’s first close follows the official launch of FEI at the Africa Energy Market Place (AEMP) in July 2018, where the initiative was presented to representatives of five African countries – Côte d’Ivoire, Ethiopia, Egypt, Nigeria and Zambia – as well as leaders from the private sector and the development partner communities.
FEI, it explained is a flagship initiative of the bank’s New Deal on Energy for Africa and part of its High-5 priority to light up and power the continent, aiming to connect 75 million households through off-grid energy access solutions by 2025.
OGEF, on the other hand is designed to provide flexible debt instruments, predominantly oriented around local currency lending for consumer finance, to companies in the household energy access sector including distributors, manufacturers, and end-user credit providers. The fund supports financially sustainable transactions that engage local capital markets to increase access to clean electricity for underserved households.
“FEI is part of a broader bank strategy to unlock more financing in decentralized energy companies, which also entails direct investments in market leaders, lines of credit for local Banks and programmatic support to countries in scaling-up their energy access agendas.
“We will keep pushing the ‘off-grid revolution’ in the African continent to achieve universal energy access by 2025,” said Amadou Hott, Vice-President for Power, Energy, Climate Change and Green Growth at the AfDB.
OGEF, the statement further noted has received significant technical and financial support from key Bank partners, namely the United Kingdom’s Department for International Development, the United States Government’s Power Africa initiative and the Shell Foundation.
Pasi Hellman, Managing Director at the Nordic Development Fund, was quoted in the statement to have said: “OGEF is the result of a strong partnership between our institutions and a perfect case study for making blended finance work for climate, green growth and the Sustainable Development Goals.”
Similarly, João Duarte Cunha, Manager for Energy Initiatives and Partnerships at the bank, further underscored that, “this broad partnership is a reaffirmation of the Bank’s catalytic role in financing renewable energy projects of all scales across Africa.”
The statement stated that LHGP Asset Management, a UK Financial Conduct Authority-regulated alternative fund manager, from Nairobi, Lagos and London, manages the OGEF.
Clemens Calice, who is a LHGP Partner, stated in thus regards: “The energy access sector demonstrates the vibrancy and innovation in Africa for market solutions to fundamental challenges. LHGP is excited to be the manager of OGEF and engage local capital markets towards the goal of connecting millions of households to electricity.”
Accordingly, OGEF’s first close exemplified this through the participation of Calvert Impact Capital and All On, and anticipation of additional future private sector investment.
The statement also quoted Wiebe Boer, CEO of Nigeria-based All On, an off-grid energy impact investment company backed by Shell to have said: “We see OGEF as a great opportunity for public and private investors to work together to address Africa’s significant access to energy gap. We look forward to working with LHGP, especially the Lagos office, to build a solid portfolio of off-grid energy companies that are improving livelihoods by providing affordable power to un- and underserved communities.”
Additionally, Jenn Pryce, President and CEO of Calvert Impact Capital, stated that: “OGEF squarely fits within our investment mandate of leveraging public capital at scale to create systemic change in sectors and geographies that have been overlooked by mainstream capital markets. We are excited to work with this group of committed investors to scale this facility and increase access to clean electricity for off-grid households in Africa.”