TechInAfrica – One of the two multi-donor trust funds within the Climate Investment Funds (CIF), known as Clean Technology Fund (CTF), has approved $20 million for FEI (Facility For Energy Inclusion). The facility’s goal is providing sustainable financing for small-scale renewable in Africa, with support from Africa Development Bank as the sponsor. The $500 million financing facility’s objective is catalyzing financial support for the solutions meant for innovative energy access.
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 various scale.
The CTF investment comprising a $4 million junior equity tranche and $16 million senior concessional loans would be withdrawn from Dedicated Private Sector Program III that provides risk-appropriate capital to finance high-impact and large-scale private sector projects in clean technologies.
“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,” Anthony Nyong, the director of climate change and green growth at the AfDB said. Economic and social growth is to be expected from the funds, as well as raising recipients’ awareness of the negative effect of climate change.
FEI is expected to contribute to the installation of around 600MW of renewable energy projects within different African countries and aiming to avoid over 30 million tonnes of CO2 which is equivalent of greenhouse gas emissions over a period of 20 years while earning positive gender and social impacts.