AfDB Renews its support to off-grid Business Recovery through the Energy Entrepreneurs Growth Fund

In July 2023, the Energy Entrepreneurs Growth Fund (EEGF) signed a US$ 6.5 million concessional loan agreement with the African Development Bank (AfDB) to replenish its facility with EEGF as part of the COVID-19 Off-Grid Recovery Platform (CRP). This patient and risk-tolerant capital funded by the Global Environment Facility (GEF), will be blended with EEGF capital to provide loans on more affordable terms to support a strong recovery and further growth of this emerging industry.

The industry has been grappling with various challenges stemming from the pandemic, including financial, economic, and operational setbacks that have cast a shadow on its viability. The situation has been further complicated by the global economic landscape, with factors like Russia’s war on Ukraine and inflationary pressures adding to the turmoil. As Jan-Henrik Kuhlmann, Head of Direct Investments at Triple Jump and manager of EEGF, pointed out “the funding from the CRP arrives as a timely lifeline for early-stage energy access companies, helping them navigate the disruptions caused by these crises. This funding allows EEGF to continue investing risk-taking debt in the sector at a time when risk capital is increasingly scarce, and companies are cash constrained. It enables companies to leverage further senior funding from less risk tolerant investors, thus demonstrating a strong catalytic effect.”

Joao Duarte Cunha, Manager of the Renewable Energy Funds Division at the African Development Bank, emphasized the Bank’s interest in deepening its collaboration with EEGF, adding “by harnessing CRP’s patient capital and innovative solutions, we aim to support the growth of the energy sector, fostering resilience and progress. CRP is a testimony to our dedication to advancing universal access across Africa in face of adversity.”

The CRP was originally developed and funded by the Sustainable Energy Fund for Africa (SEFA) in 2020, designed as a blended financing platform, partnering with various commercial debt funds. The primary objective is to provide crucial financial backing to energy access companies, ensuring the continuation of essential energy services, preserving jobs, addressing diverse market needs, and ultimately fostering a more robust and viable energy sector post-crisis. Anchored by $40 million concessional loans from SEFA and GEF, the CRP represents a united effort to overcome challenges and drive progress.

About EEGF:

The Energy Entrepreneurs Growth Fund (EEGF) is a unique fund created in 2019 by Shell Foundation and FMO, with participation from FinDev, DFC, NDF and OeEB, to make a critical contribution to the access to the energy sector whilst addressing climate change. Managed by Triple Jump and advised by Persistent, EEGF provides tailored mezzanine, equity, and debt investments combined with technical assistance to early and growth-stage companies in the access to energy ecosystem in Sub-Saharan Africa. With a fund life of 12 years, EEGF provides a longer investment holding and support period, recognizing the inherent need for such businesses in emerging economies to unlock value creation to their stakeholders. EEGF has already invested in 10 businesses, using bespoke capital solutions to meet these enterprises’ specific needs. The fund ultimately aims to reach in excess of 5 million beneficiaries, including over 240 female-led businesses, thus avoiding 4.5 million tons of greenhouse gas emissions.”

More about the Energy Entrepreneurs Growth Fund

More about the African Development Bank & Sustainable Energy Fund for Africa

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