The FinDev Canada has provided a US$13million injection to the Energy Entrepreneurs Growth Fund.
The EEGF provides technical assistance and catalytic financing to companies in the early stages of growth. This helps to increase access to affordable, reliable, clean and safe energy for households and businesses off-grid in Sub-Saharan Africa.
“A just, inclusive energy transition that reduces energy poverty and mitigates the effects of climate change requires understanding the financing needs entrepreneurs, who we depend on to achieve the world’s energy access targets,” states Gareth Zahir Bill, Shell Foundation Operations Director. FinDev Canada’s investment in the fund will allow it to expand its flexible financing options for entrepreneurs and accelerate access to reliable, clean energy for millions of people in Africa.
FinDev Canada made this transaction under the 2X Canada Inclusive Economic Recovery facility, which was launched by FinDev Canada. It was funded by Global Affairs Canada. The 2X Challenge criteria will ensure that at least half the energy companies eligible for EEGF financing meet these requirements. The Fund will invest in African women business owners and consumers to address their energy needs. The Fund will also promote inclusive practices in its portfolio companies to help women economic empowerment in the region.
Access to energy is a major barrier to development. The current situation in Sub-Saharan Africa is that 600 million people do not have access to electricity. This corresponds to approximately three-quarters the world’s population who lacks access to energy. Despite the progress made in the past decades to reduce the number of people who don’t have electricity access, the COVID-19 pandemic has reversed this trend and many countries are now far from reaching universal access by 2030.
Paulo Martelli (Vice President and Chief Investment Officer at FinDev Canada), stated that the pandemic has slow down electrification in Africa. This was already happening before the crisis. FinDev Canada’s 2X Canada facility and EEGF’s increased investment capacity in this sector support energy companies that are committed to increasing access to reliable and clean energy for African households. This will lead to inclusive and sustainable growth, and the improvement and protection of millions of people.
EEGF has recently made three investments in innovative access-to-energy enterprises:
- Baobab+ Cote d’Ivoire supports low-income households and microentrepreneurs to gain energy autonomy and digital access within Sub-Saharan Africa.
- yellow is a top Solar Home Systems pay as-you-go company that serves off-grid households in Malawi and Uganda.
- Redavia provides solar units to industrial and commercial businesses in Eastern and West Africa. This allows them to contribute to local economic development and reduce greenhouse gas emissions.