The African Development Bank (AfDB) has approved $20 million for the Facility for Energy Inclusion (FEI). The facility was sponsored by the bank to provide sustainable financing for small-scale renewables in Africa.
The FEI is a $500 million financing platform whose objective is to catalyze financial support for innovative energy access solutions.
The FEI On-grid, a targeted $400 million fund, supports improved energy access through the development of small-scale renewable energy generation and mini-grids across Africa, while the Off-Grid Energy Access Fund (OGEF), a targeted USD 100 million fund, supports off -grid energy distribution companies and boosts their long-term capacity to access capital markets at scale.
The CTF investment, composed of a $4 million junior equity tranche and a $16 million senior concessional loan, will be drawn from the dedicated private sector program III, designed to provide risk-appropriate capital to finance high-impact, large-scale private sector projects in clean technologies.
Stressing the difficulty rural areas have in attracting investment for affordable and productive electricity, Anthony Nyong, Director of Climate Change and Green Growth at the African Development Bank said the funds would contribute to economic and social growth and enhance its recipients’ resilience to the effects of negative climate change.
“Access to affordable and reliable energy has huge benefits at various levels of any society.
Most of the 600 million people estimated to lack access to modern energy services in Sub-Saharan Africa are also among the most vulnerable to the disastrous consequences of climate change,” he said.