Business

Africa Development Bank Makes USD 100 Million Investment on Energy

African Development Bank (AfDB) approves USD 50 million equity investment and USD 50 million convertible loan to seed the establishment of the multi-investor USD 500 million Facility for Energy Inclusion (FEI).

The financing package of USD 100 million by the Board of Directors of the African Development Bank (AfDB) is a result of the Bank’s New Deal on Energy for Africa, which is a strategy built on five principles: (i) raising aspirations to solve Africa’s energy challenges; ii) establishing a Transformative Partnership on Energy for Africa; (iii) mobilizing domestic and international capital for innovative financing in Africa’s energy sector; (iv) supporting African governments in strengthening energy policy, regulation and sector governance; and (v) increasing African Development Bank’s investments in energy and climate financing.

The board approved a full package of USD 100 million, which consists of USD 50 million convertible senior loan and USD 50 million equity, to support the Facility for Energy Inclusion (FEI), a pan-African renewable energy debt fund. The investment is expected to provide energy access for an estimated 3 million people.
FEI’s focus will be providing senior and mezzanine debt to off-grid, mini-grid and small scale Independent Power Producers (IPP), i.e. projects with total costs under USD 30 million. The Fund will provide hard and local currency financing.

The bank’s contribution is simply a part sum of the full amount USD 500 million, and FEI seeks to raise up to USD 400 million in additional investment from like-minded DFIs, impact investors and commercial banks. In preparation for this, AfDB has held informal discussions with potential investors from the UK, US, Germany, Japan, and South Africa. A first closing is expected by mid-2017.

FEI aims to improve the quality of life downgraded by the lack of energy resources in underserved areas across Africa. As such, this will also result into creating a significant number of jobs, new connections, and new opportunities for broader energy access, thus benefiting millions of citizens.

Most Read Today

Find DHgate android tablet pc for sale online Tutu App
Tutu App
dice designs
To Top