A $250 million effort to ignite renewable energy markets in Africa’s neglected areas was announced by Acumen on Monday. The initiative is called Hardest-to-Reach.
This effort, which is essential to the achievement of universal energy access, was presented at the Sustainable Development Goal 7 Pavilion at the Conference of the Parties (COP28) with the Green Climate Fund (GCF), a crucial supporter.
For low-income communities in sub-Saharan Africa that live outside of the grid, it will expand on the success that Acumen has had in providing access to energy.
Hardest-to-Reach is the first blended financing effort that is solely devoted to the provision of low-income individuals in underserved areas in Africa with access to energy that is both clean and cheaper.
USAID Power Africa, Sir Christopher Hohn, The Global Energy Alliance for People and Planet (GEAPP), and Shinhan Bank are some of the other important supporters of this initiative.
“There is currently a planet-sized market failure that impedes Africa’s clean energy future,” said Jacqueline Novogratz, Founder and CEO of Acumen.
“That’s not just a loss for the hundreds of millions of people directly affected by limited access to electricity; the entire world loses out by leaving Africa behind. And bringing clean energy to those without electricity today is one of the most powerful things we do for both adaptation and long-term mitigation.”
“At Acumen, we’ve worked with entrepreneurs in the energy sector who have taken capital, demonstrated the viability of their companies to private investors, and provided clean energy to hundreds of millions and jobs to hundreds of thousands. We look forward to multiplying these successes with the goal of achieving universal energy access and avoiding millions of tons of carbon emissions in the coming years.”
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Electricity inaccessibility
The enormous energy deficits that exist in developing nations cast a shadow over the climate goals that are being pursued. Beyond the grid, there are still 675 million people who do not have access to electricity. Eighty percent of these people are located in sub-Saharan Africa. These individuals continue to rely on kerosene, charcoal, wood, gasoline, and diesel to power their lives.
By providing off-grid solar enterprises with flexible funding that prioritises effect, this new effort will help sub-Saharan nations that have low rates of electricity and high rates of poverty improve their economic conditions.
“Through $65 million in direct funding, the Green Climate Fund is proud to team up with Acumen to accelerate just, inclusive energy transitions in sub-Saharan Africa’s poorest regions, often neglected by traditional investors,” said Green Climate Fund Executive Director, Mafalda Duarte.
The impact of Acumen’s initiative
“The Hardest-to-Reach programme blends debt, equity, grants and technical assistance to create and open up markets in new regions, providing clean energy for an estimated 60-plus million people across 16 countries, including Somalia.”
Hardest-to-Reach employs a novel impact-linked funding method in addition to grants and equity in order to suit the requirements of off-grid energy firms at every level of their development.
“Acumen has been a crucial investor in our company not just as a financier but also as a long-term strategic partner,” said Jonathan Cedar, co-founder and CEO of BioLite.
“Without their investment, BioLite would not have grown by 50x and expanded our reach to impact 8 million lives and offset 2 million tons of carbon.”
“I am excited to partner with Acumen and share their determination to achieve universal energy access in sub-Saharan Africa. Acumen’s unique track record of investing at the intersection of poverty and climate sets this initiative apart,” said Sir Christopher Hohn, co-founder and Chair of The Children’s Investment Fund Foundation (CIFF).
Acumen is continuously regarded as a preferred partner by climate financiers who are focused on effect. In addition to their direct investing activities, they have committed cash totalling $153 million in their sponsored funds.
As a result of Acumen’s commitment to assisting underserved communities in their transition to clean energy, the organisation has made investments in forty different businesses, which has had a beneficial influence on the lives of over 223 million people and prevented the emission of 58.5 million tons of greenhouse gases.
Early support from the Fourdoves Foundation, the Good Energies Foundation, and The Osprey Foundation, as well as assistance from the United Kingdom Government through the Transforming Energy Access (TEA) Platform, the Bill and Melinda Nussey Foundation, Reed Hastings, and Chris Anderson and Jacqueline Novogratz, made it possible for the initiative to be carried out.