IFC signs $80 million to bolster Facility for Energy Inclusion (FEI) in Africa, providing clean and reliable energy
The International Finance Corporation (IFC) has signed an $80 million financing package to bolster the Facility for Energy Inclusion (FEI), a pan-African fund dedicated to advancing small-scale decentralized renewable energy (DRE) projects. This initiative aims to provide clean and reliable energy to Africa’s commercial and industrial sectors, fostering economic activity across the continent….
The financing will contribute to adding approximately 115 megawatts of generation capacity in 15 African countries, including the Democratic Republic of the Congo, Ghana, and Kenya. FEI focuses on offering debt financing for small-scale renewable energy generation and storage projects, benefiting commercial and industrial entities, telecom infrastructure, and mini-grids.
The $80 million financing package comprises a $30 million loan from IFC, a $20 million loan mobilized from the Managed Co-Lending Portfolio Program (MCPP) to facilitate longer-term financing, and up to $30 million in blended finance. The blended finance portion includes $15 million from the International Development Association’s Private Sector Window Blended Finance Facility and $15 million from the Finland – IFC Blended Finance for Climate Program.
Nigerians have lauded the initiative, expressing optimism about the positive impact on the continent’s energy landscape. The partnership is seen as a significant step toward addressing the energy deficit in Africa, with IFC’s investment aligning with the World Bank Group’s strategy to achieve universal access to electricity by 2030.
Sarvesh Suri, IFC’s Regional Industry Director for Infrastructure and Natural Resources in Africa, emphasized the importance of the partnership in developing Africa’s DRE market. The DRE market is seen as a viable solution to expanding access to affordable and climate-friendly energy solutions, especially in regions where traditional utilities struggle to provide consistent and affordable electricity.
Nigerians on social media have commended the collaboration, citing its potential to displace carbon-intensive power sources and improve the quality and accessibility of electricity. The FEI initiative, managed by Cygnum Capital Asset Management, has gained recognition as a lead lender in the DRE market, receiving $220 million commitments across 23 countries to date.
The IFC’s investment in FEI demonstrates a commitment to accelerating electrification in Africa, addressing the energy challenges faced by over 600 million people in sub-Saharan Africa without access to electricity. Nigerians are hopeful that such initiatives will contribute significantly to the continent’s sustainable development goals and enhance the overall quality of life for its citizens.