FinDev Canada, the development finance institution of the North American nation, is committing as much as $13 million to the Energy Entrepreneurs Growth Fund (EEGF) as a limited partner.
The EEGF offers catalytic financing and technical assistance to early- and growth-stage companies that increase access to clean and affordable energy for off-grid households and businesses in sub-Saharan Africa. It seeks to provide flexible and long-term financing solutions spread across debt, equity and mezzanine debt.
The $120-million fund was created in 2019 by Shell Foundation, co-funded with UK Aid from the UK government and Dutch development financier FMO. It is managed by impact investment firm Triple Jump, with Persistent Energy Capital as an advisor.
The EEGF has backed companies such as Baobab+ in Côte d’Ivoire; Yellow, a solar home systems pay-as-you-go company serving off-grid households and microentrepreneurs in Malawi and Uganda; and Redavia, which provides solar units to commercial and industrial businesses in Eastern and West Africa.
According to FinDev Canada, about 600 million people in sub-Saharan Africa lack access to electricity. This corresponds to three-quarters of the global population without access to energy. The Covid-19 pandemic has pushed many countries away from the goal of achieving universal access by 2030, the DFI said.
“The pandemic has slowed down electrification in Africa, which was already behind before the health crisis,” said Paulo Martelli, chief investment officer of FinDev Canada.
By increasing the EEGF’s capacity to invest in this sector, FinDev Canada will seek to expand access to clean and reliable energy for African households and businesses, he added.