The Board of Directors of the African Development Bank (AfDB) has approved a financing package of USD 100 million, comprising USD 50 million equity and USD 50 million convertible senior loan, to seed the Facility for Energy Inclusion (FEI), a pan-African renewable energy debt fund. The investment, which is expected to catalyze energy access for an estimated 3 million people, is rooted on the Bank\u2019s New Deal on Energy for Africa and increasing global recognition on the importance of energy access in Africa.<\/p>\n
FEI will focus on providing senior and mezzanine debt to off-grid, mini-grid and small scale Independent Power Producers (IPP), i.e. projects with total costs under USD 30 million. The Fund will provide hard and local currency financing.<\/p>\n
The Bank\u2019s approval opens the door to a formal fundraising process, which seeks to raise up to USD 400 million in additional investment from like-minded DFIs, impact investors and commercial banks. In preparation for this, the AfDB has held informal discussions with potential investors from the UK, US, Germany, Japan, and South Africa. A first closing is expected by mid-2017.<\/p>\n
FEI has been structured by the Bank in consultation with other DFIs and in close collaboration with Dalberg, a globally reputable investment advisory firm, and Hunton & Williams, expert legal advisors with previous experience in fund creation. The structuring effort was made possible through generous financial support from the Sustainable Energy fund for Africa (SEFA), a multi-donor trust fund anchored by the Governments of Denmark and the United States \u2013 to support Africa\u2019s renewable energy sector.<\/p>\n
The Facility for Energy Inclusion will process eligible projects with relative speed through a highly specialized and focused external Fund Manager (FM). To this effect, the Bank has undertaken an international open tender inviting debt and equity fund managers with proven track-record in Africa. In November 2016, six prospective fund managers were shortlisted, from an initial pool of sixteen. The Bank expects to formally appoint the FM by February 2017.<\/p>\n
FEI aims to create a significant number of jobs, new connections, and new opportunities for broader energy access, thus benefiting millions of citizens in underserved areas across Africa. It is well-documented that women bear the brunt of inadequate energy access based on distribution of responsibilities in the majority of African households. As a result of the Fund\u2019s interventions, it is expected that the quality of life of many of them will be significantly improved.<\/p>\n","protected":false},"excerpt":{"rendered":"