African Solar Energy Startups Can Benefit from Energy Access Relief Fund’s $68m Funding
Social Investment Managers and Advisors’ (SIMA) Energy Access Relief Fund (EARF), that recently raised $68m in capital has revealed it will provide finance to almost 90 energy-related businesses in Sub-Saharan Africa and Asia in the form of short-term loans.
The EARF was launched this year by a coalition of development investors and financial institutions with the aim of raising $80m in total to ensure that at least 20 million people in Sub-Saharan Africa and Asia have access to energy.
Geoff Manley the Head of Energy Access and Efficiency speaking said that the EARF’s low interest loan is to ensure that small businesses survive and that Africans have access to electricity.
“The EARF’s Flexible and Innovative Financial Structure brings together different types of capital to provide low-interest loans and liquidity. Institutions like the CDC Group, the CFB, the FMO, and many others mobilize capital to ensure the survival of small and medium-sized businesses and expand energy access to 800 million people without electricity” Geoff said.
In order to qualify, startups must meet all of the following primary and secondary criteria:
- a) Last pre-COVID fiscal year’s proportion of revenues from Energy Access Activities >=50%
b) Last pre-COVID fiscal year’s annual revenues should be between US$75K and US$50 Million (both inclusive)
c) Months of operations should be minimum of 24 months through end of December 2020
d) (Total Equity) / (Total Assets) as of end of March 2020 >= 20%
e) Availability of unqualified audit opinion or a credible reference from either vendors, suppliers, institutional equity or debt investors, or institutional grant providers.
f) Operating in Africa or Asia.
Among the secondary criteria, smaller companies must meet at least three criteria while larger companies must meet at least four criteria.
- a) Average of FY 2018 and FY 2019 revenue growth >= 5% (for smaller) and 10% (for larger companies)
b) Management’s local market experience until Dec 2020 >= 18 months (for smaller) and 30 months (for larger companies)
c) The company should be women owned and/or managed
d) The company should service low income customers
e) (Current cash balance) / (last two months’ operating expenses) >= 100% (for smaller) and 125% (for larger companies)
f) Actual collections from customers / Scheduled collections >=65% (for the period Oct 2019 to Mar 2020)
Interested startups can click here to apply as applications will be reviewed on a rolling basis as they come in.