Spearheaded by the African Development Bank, FEI is a targeted $400m fund to enhance energy access across Africa
The Facility for Energy Inclusion (FEI), which is a targeted $400m fund to improve energy access across Africa, has secured $160m in commitments from investors for small-scale renewable energy projects.
Lead by the African Development Bank (AfDB), FEI is a new platform to collect financial support for innovative small-scale energy access projects that include – off-grid solar, small IPPs, captive installations and mini-grids.
As the anchor sponsor, AfDB has provided $90m funding for the platform that includes a $20m provided as the implementing agency of the Clean Technology Fund.
African Development Bank Power, Energy, Climate & Green Growth acting vice-president Wale Shonibare said: “After three years of hard work, we are pleased to see the second and larger piece of our energy access debt funding platform — FEI — up and running on the back of very significant commitments from our partners.
“We look forward to seeing FEI catalyze financing for new energy sector business models and accelerate our efforts to electrify Africa.”
German Development Bank KfW has provided €25m to the platform
The European Commission has committed €25m ($27.8m) for the fund, while the Norwegian Investment Fund which is known as Norfund has provided $23m, and German Development Bank KfW has provided €25m ($27.8m).
A $10m Project Preparation Facility (PPF) from the Global Environment Facility, which will offer reimbursable grants for transaction advisory to facilitate financial close, has been provided for FEI.
AfDB said that the projects located in the sub-Saharan African countries, which have lower electricity access rates, will receive priority.
The projects with less than $30m of capital expenditure and with below 25MW generating capacity are also eligible to receive funding from FEI.
In June last year, AfDB received a €40m investment from the European Commission for the FEI.