Financing package signed for US$500 million Energy Inclusion Fund

The International Finance Corporation (IFC) has signed a US$80 million financing package to bolster the Facility for Energy Inclusion (FEI), a pan-African fund dedicated to advancing small-scale decentralized renewable energy (DRE) projects.

This initiative seeks to provide clean and dependable energy to support commercial and industrial sectors in Africa, promoting economic growth throughout the continent. The funding will play a role in increasing power generation capacity by around 115 MW in 15 African nations, such as the Democratic Republic of the Congo, Ghana, and Kenya. FEI specializes in offering debt financing for small-scale renewable energy generation and storage initiatives, benefiting commercial and industrial businesses, telecom infrastructure, and mini-grids. The US$80 million financing package includes a US$30 million loan from IFC, a US$20 million loan mobilized through the Managed Co-Lending Portfolio Program (MCPP) to facilitate extended-term financing, and up to US$30 million in blended finance. The blended finance component comprises US$15 million from the International Development Association’s Private Sector Window Blended Finance Facility and US$15 million from the Finland – IFC Blended Finance for Climate Program.

In numerous African countries, unreliable and costly electricity services lead to power outages and dependence on fossil fuel generators. This initiative aims to replace carbon-intensive power sources, enhancing access, affordability, and reliability of electricity while supporting the growth of the Distributed Renewable Energy (DRE) market. IFC's investment in the Facility for Energy Inclusion fund aligns with the World Bank Group's strategy to expedite electrification in Africa and achieve universal access by 2030.