AFRICA: IFC finances $80m to bring clean energy to businesses

As part of a recently concluded partnership, the International Finance Corporation (IFC) will provide $80 million to the Facility for Energy Inclusion (FEI). The aim is to finance the production of renewable energy for commercial and industrial (C&I) customers.

The International Finance Corporation (IFC) is supporting the production of renewable energy for businesses. The private sector financing arm of the World Bank Group has pledged $80 million to the Facility for Energy Inclusion (FEI), a pan-African fund that supports small-scale decentralised renewable energy projects, bringing energy to Africa’s commercial and industrial (C&I) sectors.

Of this funding, $30 million is an IFC loan. There is also a $20 million loan under the Co-financing Portfolio Management Programme (CPMP) which will leverage $30 million of blended finance. There is also $15 million from the International Development Association’s (IDA) private sector window blending facility and $15 million from Finland’s and the IFC’s blended climate finance programme.

Development of 115 MW of capacity

“This is an important milestone for the EIF, which is now recognised by the main market players as a leading lender in the decentralised renewable energy market in Africa, with $220 million in commitments in 23 countries to date,” explains Orli Arav, Head of Debt Funds at Cygnum Capital Asset Management, the investment company that manages the EIF.

The financing granted by the IFC “will make it possible to increase production capacity by around 115 MW in some fifteen African countries, including the Democratic Republic of Congo (DRC), Ghana and Kenya”, says the World Bank subsidiary responsible for the private sector. For the record, the EIF finances small-scale renewable energy production and storage projects designed to supply commercial and industrial (C&I) companies, telecommunications infrastructures and solar mini-grids in several African countries.

In November 2023, the financing facility signed for a $20 million line of credit for CrossBoundary Energy (CBE). The financing provided by Standard Bank as part of a $50 million facility will be used to produce solar energy to power businesses in sub-Saharan Africa

Cover photo: By AFRIK21