AfDB announces cheap loans to back off-grid solar in Africa

The African Development Bank has announced that European and US donors will provide $20 million of concessional loans to support pay-as-you-go solar companies in sub-Saharan Africa.

September 27, 2022Max Hall

The off-grid solar sector was battered by the pandemic.

Image: Hhah, Pixabay

A fund set up to help off-grid solar companies in sub-Saharan Africa to recover from the Covid-19 crisis will receive $20 million in public funding for the second round of its recovery effort.

The African Development Bank (AfDB) said last week that the Covid-19 Recovery Platform (CRP) would receive the cheap loans, with $13 million coming from the US-based Global Environment Facility and $7 million from the Sustainable Energy Fund for Africa. The latter donor is funded by the governments of Denmark, Italy, the United Kingdom, and the United States.

The AfDB said the loans will be paid into the CRP blended finance vehicle and used to attract a further $70 million from private investors to back off-grid solar.

The money will be disbursed by the Off-Grid Energy Access Fund which is managed by London-based Lion’s Head Global Partners, Amsterdam’s Triple Jump, and New York-based Social Investment Managers and Advisors. The Off-Grid Energy Access Fund is part of the Facility for Energy Inclusion, which is financed by the state-owned development institutions of Norway, Germany, Austria, the EU, and the multilateral Clean Technology Fund.

The AfDB said the CRP blended finance vehicle had already distributed more than $50 million in cheap loans to a dozen off-grid energy companies operating across Africa.

“The Off-Grid Energy Access Fund was able to offer affordable financing solutions in markets such as Malawi and Sierra Leone that helped companies to reduce the impact of increased currency volatility and rising logistics costs,” said Alix Graham, fund lead for the Off-Grid Energy Access Fund, in a press release issued by the AfDB.

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Author: systems