Consortium Mobilizes $200m for Green Energy Providers in Africa
By Chibisi Ohakah, Abuja
A consortium has announced the mobilization of $200million for renewable energy professionals, and for the electrification and energy transition in Africa. The facility will be launched in the first half of 2022.
The consortium, Paris based Eiffel Investment Group and an investment advisory firm, Finergreen, said they are committed to renewable energy for the underserved in Africa.
Initially, the two partners will mobilize 200 million dollars exclusively dedicated to professionals in the renewable energy sector. The fund will host financing from public and private institutions, said Fabrice Dumonteil, head of the investment company.
Ultimately, the new initiative will be launched in Africa to increase financing for renewable energy. It is a mechanism that will be set up by the Paris-based Eiffel Investment Group in partnership with Finergreen, an investment advisory firm dedicated to renewable energy, he said.
Already active in Europe, the new facility will focus on energy transition and electrification in Africa, the investment company stated. According to Eiffel, the initiative aims to address the growing demand for bridge financing in Africa.
“As is often the case, raising capital from international investors, multilateral organizations, development banks and local partners can be a long and complex process. Also, the unavailability of long-term capital when projects are ready to enter the construction phase is a major factor in the slow deployment of renewable energy on the continent,” Dumonteil said in statement issued by his company.
According to him, the fund will provide bridge financing. “This type of financing is intended to bridge the gap between an unforeseen event and a long-term financing solution to avoid a liquidity shortage,” he said.
According to data from the International Renewable Energy Agency (IRENA) and Bloomberg NEF, analyzed by Eiffel and Finergreen, the demand for such a financing model is large, $600 million per year.
He confirmed that Eiffel had tested this financing model with a 3-million-euro financing to ManoCap Energy for the deployment of renewable energy systems for productive use in Ghana and Sierra Leone.
According to Eiffel, other European and international financial institutions are evaluating the possibility of contributing to the establishment of this mechanism for financing electrification via renewable energy in Africa.
The European Investment Bank (EIB) is set to become the largest contributor to this fund dedicated to Africa, and that the European Union (EU) development bank has just launched the verification process to invest 30 million euros.