AFRICA: FMO and Shell Foundation support renewable energy suppliers

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AFRICA: FMO and Shell Foundation support renewable energy suppliers©Khamkhlai Thanet/Shutterstock

The Dutch Development Finance Company (FMO) and the Shell Foundation have launched the Energy Entrepreneurs Growth Fund (EEGF). It is a financing fund for renewable energy suppliers in sub-Saharan Africa.

A new initiative has recently been started to catalyse access to electricity in sub-Saharan Africa. It is a fund created by the Dutch Development Finance Corporation (FMO) and the Shell Foundation, two entities with a strong presence in the African energy sector.

Named Energy Entrepreneurs Growth Fund (EEGF), the fund has an initial amount of $120 million. To manage the fund’s portfolio, FMO and the Shell Foundation have chosen Triple Jump, an investment fund manager based in Amsterdam, the Netherlands. The Swiss off-grid company Persistent will act as EEGF’s investment advisor.

The main beneficiaries of the EEGF

The EEGF will be used to finance growing companies specialising in the provision of electricity supply solutions from renewable sources. These solutions must be designed to provide access to electricity to households, as well as to small and medium-sized enterprises (SMEs). According to the FMO, the EEGF will contribute to improving Africa’s energy situation.

“Recent research by the Organisation for Economic Co-operation and Development (OECD) shows that sub-Saharan Africa has the lowest energy access rate in the world, with 600 million people without electricity and more than 125 million households without access to modern energy services. This situation has disastrous effects on economic growth and sustainable development,” explains the FMO.

The EEGF will not only finance renewable energy suppliers. Over a 12-year period, the fund will provide 25 companies with “flexible loans” combined with technical assistance “currently lacking in the off-grid energy ecosystem”. It will “mainly provide mezzanine structures as well as equity and debt investments with tailor-made solutions to meet the changing needs of growing energy companies,” says the FMO.

Jean Marie Takouleu


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