The Covid-19 Off-Grid Recovery Platform (CRP) second phase will be supported by a $20 million concessional investment that has been approved by the African Development Bank Group (AfDB). The CRP is a blended finance program that aims to provide access to private capital for energy access businesses in order to lessen the pandemic’s negative effects while improving clean energy access and fostering a green economic rebound.
The extension will be financed by $7 million from the Sustainable Energy Fund for Africa (SEFA), a multi-donor fund run by the African Development Bank, and the remaining $13 million from the Global Environment Facility (GEF), a multilateral environmental fund.
For the energy access sector, the second phase will contribute to the creation of an extra $70 million in funds. This is to cushion the pandemic’s persistent impacts on supply chains, inflation, the rising cost of capital, and the effects of the conflict in Ukraine.
Mark van Doesburgh, deputy head of sustainable energy at Triple Jump, said: “We appreciate the continuous support provided by the African Development Bank to accelerate progress towards SDG 7. The concessional funding provided under CRP phase II comes at a critical moment for early-stage energy access companies that continue to be affected by Covid-19 and allows Energy Entrepreneurs Growth Fund to release flexible financing into the sector at a time when risk-capital is increasingly scarce.”
What the Covid-19 Off-Grid Recovery Platform Offers
Alix Graham, Fund Lead of the Off-Grid Energy Access Fund noted that with the SEFA concessional funding under CRP, the Off-Grid Energy Access Fund was able to offer affordable financing solutions in markets like Malawi and Sierra Leone that helped companies to reduce the impact of increased currency volatility and rising logistics costs. She defined CRP as a collaboration between the public and private sectors that provided creative financing options without distorting the market or displacing private capital.
Lion’s Head Global Partners, one of three fund managers who jointly anchored Phase I of the Covid-19 Off-Grid Recovery Platform, is in charge of managing the Off-Grid Energy Access Fund. Triple Jump and Social Investment Managers and Advisors are the other two.
Energy access companies have access to a wide range of flexible debt financing options on more affordable terms through CRP partners. To date, 12 energy access companies that are commercializing and delivering solar residential systems, mini-grids, and commercial and industrial solar irrigation solutions have been approved for over $50 million in soft funding.
According to Joo Duarte Cunha, Manager of the Renewable Energy Funds Division in charge of SEFA at the African Development Bank, the partnership has been able to mitigate the unprecedented challenges faced by the energy access industry.
“Thanks to this strong partnership, we have been able to mobilize over $140 million of patient capital to mitigate the unprecedented challenges faced by the energy access industry in recent years and to protect progress towards universal access in Africa,” said Cunha.