AfDB collects more funds for its Facility for Energy Inclusion
The Clean Technology Fund (CTF) one of two multi-donor trust funds within the Climate Investment Funds (CIF) last week approved $20 million for the Facility for Energy Inclusion (FEI), a facility sponsored by the African Development Bank to provide sustainable financing for small-scale renewables in Africa, the bank announced in a press release.
FEI is a $500 million financing platform whose objective is to catalyze financial support for innovative energy access solutions. FEI On-grid, a targeted $400 million fund, supports improved energy access through the development of small-scale renewable energy generation and mini-grids across Africa, while the Off-Grid Energy Access Fund (OGEF), a targeted $100 million fund, supports off -grid energy distribution companies and boosts their long-term capacity to access capital markets at scale, the AfDB explains.
The CTF investment, composed of a $4 million junior equity tranche and a $16 million senior concessional loan, will be drawn from the Dedicated Private Sector Program III, designed to provide risk-appropriate capital to finance high-impact, large-scale private sector projects in clean technologies.
Stressing the difficulty rural areas have in attracting investment for affordable and productive electricity, Anthony Nyong, AfDB Director of Climate Change and Green Growth said the funds would contribute to economic and social growth and enhance recipients’ resilience to the effects of negative climate change.
“Access to affordable and reliable energy has huge benefits at various levels of any society. Most of the 600 million people estimated to lack access to modern energy services in Sub-Saharan Africa are also among the most vulnerable to the disastrous consequences of climate change,” he said.
FEI is expected to contribute to the installation of around 600MW of renewable energy projects across different African countries and avoid over 30 million tons of CO2 equivalent of greenhouse gas emissions over a period of 20 years while yielding positive gender and social outcomes.