The Development Finance Institute of Canada (FinDev Canada) and its 2X Canada facility will participate in the Energy Entrepreneurs Growth Fund (EEGF) with up to $13 million to target clean energy businesses in Sub-Saharan Africa.
The EEGF provides catalytic financing and technical assistance to start-up and growth-stage businesses that improve access to clean, secure, reliable and affordable energy for households and off-grid businesses in Sub-Saharan Africa. The Fund was established in 2019 by the Shell Foundation with support from the UK government and the Dutch Entrepreneurship Development Bank, FMO.
Using blended finance allows EEGF to unlock additional capital, which has proven to be a challenge during the COVID-19 pandemic. It should also have a positive impact on improving access to energy and promoting women’s economic empowerment.
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This is the first transaction that FinDev Canada has made under the recently launched 2X Canada: Inclusive Economic Recovery program. This is a facility set up by FinDev and funded by Global Affairs Canada. At least half of the energy companies eligible for FEEG funding must meet the 2X Challenge criteria. The Fund will respond through its investments to the particular energy needs of African women consumers and entrepreneurs. The Fund is committed to promoting inclusive practices within its portfolio companies, thereby contributing to a positive impact on women’s economic empowerment in the region.
Progress towards energy access for all by empowering energy entrepreneurs
Despite the progress made over the past decades to reduce the number of people in sub-Saharan Africa who do not have access to electricity, the COVID-19 pandemic has reversed the trend.
Paolo Martelli, Vice President and Chief Investment Officer of FinDev: “The pandemic has slowed electrification in Africa, which was already lagging before the health crises. By increasing EEGF’s capacity to invest in this sector, FinDev Canada and its 2X Canada facility are supporting energy companies committed to expanding access to clean and reliable energy for African households and businesses, leading to inclusive and sustainable growth. sustainable and improving millions of lives.
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By providing flexible and patient financing solutions in the form of catalytic debt, mezzanine debt, equity and technical assistance, all tailored to the needs of the energy entrepreneur, the Fund enables them to scale and ultimately become more attractive to established debt and equity markets.
EEGT recently completed three investments in innovative energy access companies: Baobab+ Côte d’Ivoire, which helps underserved households and microentrepreneurs gain energy autonomy and digital services in sub-Saharan Africa; PAYGo for Yellow Home Systems, which serves off-grid households and microentrepreneurs in Malawi and Uganda; and Redavia which supplies solar units to C&I companies in East and West Africa.
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Gareth Zahir-Bill, COO of the Shell Foundation: “A just and inclusive energy transition, which alleviates energy poverty and mitigates climate change, requires understanding the financing needs of the entrepreneurs we depend on to achieve the global goals of access to energy.
The 2X Challenge was founded by G7 development finance institutions to move more capital into investments that empower women in developing countries.