The Clean Revolution Project (CRP) is a blended finance initiative that aims to unlock private capital for energy-access companies. This is done to mitigate the pandemic’s adverse effects while advancing access to clean electricity and ensuring a green economic recovery.
For the expansion, financing of $7 million will be provided by the Sustainable Energy Fund for Africa (SEFA), a multi-donor fund managed by the African Development Bank will provide financing for the expansion. The remaining $13 million will be provided by the Global Environment Facility (GEF), which is a multilateral environmental fund.
Pandemic effect on their businesses’ supply
The pandemic’s ongoing effects on supply chains, inflation, the rising cost of capital, and the effects of the conflict in Ukraine will be cushioned by the second phase, which will assist in the creation of an additional funding pool of seventy million dollars for the energy access sector.
“With the SEFA concessional funding under CRP, the Off-Grid Energy Access Fund was able to offer affordable financing solutions in markets such as Malawi and Sierra Leone that helped companies to reduce the impact of increased currency volatility and rising logistics costs,” said Alix Graham, the Fund Lead of the Off-Grid Energy Access Fund.
She explained that the CRP was a partnership between the development and private sectors, offering innovative financing solutions without distorting the market or displacing private capital.
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Lion’s Head Global Partners is one of three fund managers jointly anchored in the first phase of the Covid-19 Off-Grid Recovery Platform. Lion’s Head Global Partners is in charge of managing the Off-Grid Energy Access Fund. Triple Jump and Social Investment Managers and Advisors comprise the other two categories.
“We appreciate the continuous support provided by the African Development Bank to accelerate progress towards SDG 7,” said Mark van Doesburgh, the deputy head of sustainable energy at Triple Jump. The concessional funding provided under CRP phase II comes at a crucial time for early-stage energy access companies still being impacted by Covid-19. Additionally, this funding enables the Energy Entrepreneurs Growth Fund to release flexible financing into the sector at a time when risk capital is becoming increasingly scarce.
The partnership will help reduce debts
By partnering with CRP, companies that provide energy access have access to a wider variety of flexible debt financing solutions that come with more favourable terms. To this day, 12 energy access companies that are commercialising and deploying solar home systems, mini-grids, and commercial and industrial solar irrigation solutions have been granted approval for a total of over $50 million in grants and other forms of low-interest financing.
According to Joao Duarte Cunha, Manager of the Renewable Energy Funds Division in charge of SEFA at the African Development Bank, “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.” This statement was made in reference to the fact that the industry has been confronted with unprecedented challenges in recent years.
About AfDB
The African Development Bank (AfDB) provides loans to African governments and businesses that want to expand into the region.
Since September 2014, Abidjan, Ivory Coast, has been home to the headquarters of the African Development Bank Group, also known as the Banque Africaine de Développement.