Kenyan firms producing off-grid power can now access capital from a new Sh10.3 billion fund that is being set up by the African Development Bank (AfDB) and a group of international financial investors.
The fund, known as the Facility for Energy Inclusion Off-Grid Energy Access Fund (FEI OGEF), is set to provide local and hard currency loans to off-grid energy companies that specialise in producing clean electricity, focusing initially on East and West Africa.
Power projects such as wind and solar in parts of northern Kenya, which are far from the national grid are the likely beneficiaries from the fund.
“The fund will be managed by Lion’s Head Global Partners operating out of offices in Nairobi, Lagos and London, with an initial focus on East Africa as well as Côte d’Ivoire, Ghana and Nigeria, and looking to build a strong pipeline of transactions throughout the region,” said the AfDB in a statement.
“The pioneering fund will unlock and catalyse financial sector and local currency participation in this growing green finance opportunity.”
AfDB added that the fund would provide for a blended capital structure, by making an equity investment in projects thus providing an assurance to early investors such as development finance institutions and other commercial investors.