One of the biggest barriers to the widespread development and adoption of renewable energy in Africa is the lack of financing. Traditional lenders such as banks have limited appetite for private sector renewables projects, particularly those led by new players. Private Equity has thus far had the greatest impact with funds such as the CDC Africa Renewable Energy Fund investing in solar, hydro, wind, geothermal and stranded gas projects in Uganda, Ghana, Cameroon, Ethiopia, Madagascar, and Tanzania.
The alternative to commercial/concessional debt or equity and mezzanine debt are grants. ONGOLO has compiled a list of five grant schemes that target countries in Africa and provide technical assistance:
#1 Sustainable Energy Fund for Africa (SEFA)
The African Development Bank (AfDB) manages SEFA, which was launched in 2011 in partnership with the Danish government and has since received contributions from key donors such as Germany, Italy, Norway, Spain, Sweden, United Kingdom and United States. The fund is designed to unlock private sector investments in renewable energy and to achieve specific outcomes: increase renewable energy produced, reduce greenhouse gas emissions, and create jobs, especially for women.
SEFA funds small independent power producers (less than 10MW) in solar, wind, biomass, and hydro. It also supports solar home systems, mini-grids, and gas alternatives for cooking. SEFA is currently available to entities operating across Sub-Sahara Africa (48 countries) and hopes to cover North Africa in future. The ticket size of each grant ranges from $500k to $1m. Technical assistance, including the business model analysis, legal and tax advisory, is provided free of charge. Email: [email protected]
#2 Partnering for Green Growth and the Global Goals – P4G
P4G was launched in 2018 to develop public-private partnerships that support the achievement of the Sustainable Development Goals (SDGs) and the Paris Agreement. It runs an annual competition to select start-up or scale-up grant recipients in Eastern and Southern Africa. Recipients have come from Ethiopia, Kenya and South Africa.
Projects funded include small independent power producers (less than 10MW) in solar, wind, biomass, and hydro; commercial and industrial projects; mini-grids and solar home systems; clean cooking such as the use of LPG. It places a strong emphasis on building a circular economy by minimising food loss and waste. The ticket size of each grant ranges from $500k to $1m. Technical assistance, including business model analysis, financial advisory and capital raising, is provided free of charge. Email: [email protected]
#3 Beyond the Grid Fund for Africa (BGFA)
BGFA was established by the Swedish government in 2019 after a successful pilot project undertaken in Zambia. The fund is managed by the Nordic Environment Finance Corporation (NEFCO). BGFA aims to kick-start markets for clean, off-grid energy and currently targets mini-grids and solar home system projects in Zambia, Uganda, Mozambique, Liberia, and Burkina Faso.
The ticket size of each grant is a minimum of €1m. Projects are expected to derive benefits for the environment, social and gender. Technical assistance is provided for free and includes support for financial advisory and capital raising. Email: [email protected]
#4 Powering Renewable Energy Opportunities (PREO)
PREO is managed by the IKEA Foundation and UK Aid. It is jointly funded by the Stichting INGKA Foundation, which was founded by Ikea Founder and Swedish billionaire, Ingvar Kamprad, and the Foreign, Commonwealth & Development Office (FCDO) formerly known as the Department for International Development (DFID).
PREO funds commercial or industrial projects, clean cooking and agriproductive projects in Sub-Saharan Africa. The ticket size of each grant ranges from £50-200k. It provides free technical assistance. Email: [email protected]
#5 AlphaMundi Foundation
AlphaMundi is an impact investing advisory firm that seeks to promote sustainable agriculture, renewable energy, and financial services to the poor. The group has invested over $60m in over 150 transactions across Latin America and Africa, benefitting more than 5m people. Target projects include small independent power producers (less than 10MW) in solar, wind, biomass, and hydro; mini-grids and solar home systems; and agribusiness and food.
AlphaMundi provides a wide range of technical assistance for free: financial advisory and capital raising; financial management and new management systems; business model analysis; support with marketing and distribution; supply chain management support. The ticket size of each grant ranges from $5-50k.Email: [email protected]
Please email [email protected] for details of other grants, commercial debt, concessional debt, guarantees and equity + mezzanine debt options.
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