The African Development Bank (AfDB) and various partners have invested a total of US$55 million in the Facility for Energy Inclusion Off-Grid Energy Access Fund (FEI OGEF), which brings the fund closer to its first close target.

FEI OGEF is a US$100 million blended finance debt fund designed to provide loans in local and hard currencies to off-grid energy companies with the objectives of scaling up access to clean electricity for off-grid households and bringing in local financial institutions as co-lenders.

The fund directly supports the AfDB's New Deal on Energy for Africa and is part of its "High 5" priority to light up and power the continent, with the target of connecting 75 million households to off-grid energy access solutions by 2025.

The AfDB board has approved an investment of US$30 million in the fund, which follows the approval of additional investments of US$10 million from Calvert Impact Capital (CIC), US$8.5 million from the Global Environment Facility (GEF) and US$7.2 million from the Nordic Development Fund (NDF).

In addition, the NDF will provide a US$607,000 grant for technical assistance to support deal structuring and capacity development.

"FEI OGEF is the first bank instrument that enables debt financing, including in local currency, to off-grid energy access companies who need growth capital to expand their operations across Africa. The strong collaboration of the bank, SEFA and NDF in preparing and creating this fund, and the co-investment by the GEF and CIC, demonstrate the power of partnerships for clean energy access in Africa," said Astrid Manroth, director of transformative energy partnerships at the AfDB.

The fund matches local currency debt instruments with recent innovations in off-grid energy business models to scale up energy access for underserved and rural households, providing a blended capital structure whereby investments in equity provides comfort and risk cushioning to attract early participation and additional investment by development finance institutions and other commercial investors.

"This initiative highlights the close and constructive working relationship between NDF and the AfDB. We have been in lock step throughout the preparation and development cycle of the Fund. Now we have a fully packaged investment vehicle to bring to market scaling up proven clean off-grid energy solutions to the energy access challenge on the continent," said NDF Managing Director Pasi Hellman.

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 Ivory Coast, Ghana and Nigeria, and looking to build a strong pipeline of transactions throughout the region.

"The GEF is pleased to be a partner in this innovative blended finance facility which is part of GEF's strategic priority to "crowd-in" private sector investment to help countries meet their environmental and sustainability goals," said Gustavo Fonseca, director of programmes at the Global Environment Facility.

"OGEF squarely fits within our investment mandate of leveraging public capital at scale to create systemic change in sectors and geographies that have been overlooked by mainstream capital markets. We are excited to work with the AfDB and the other investors to scale this facility and increase access to clean electricity for off-grid households in Africa," said Jenn Pryce, president and CEO of Calvert Impact Capital.