London, June 26, 2019 (AltAfrica)-The African Development Bank  (AfDB.org) announced a EUR 40 million investment from the European Commission for the Facility for Energy Inclusion (FEI), a new platform for financing small-scale renewables in Africa.

The announcement was made at the energy stakeholders at a sideline event held during the Africa Energy Forum, in Lisbon, Portugal from 11-14 June.

AFDB, the European Commission, in partnership with Lion’s Head Global Partners and Fieldstone and the Lusophone Renewable Energy Association, presented the Facility to participants at the Forum.

FEI is a $500 million financing platform spearheaded by the African Development Bank to catalyze financial support for innovative energy access solutions

FEI On-grid, a targeted USD 400 million fund, supports improved energy access through the development of small-scale renewable energy generation and mini-grids across Africa, while the Off-Grid Energy Access Fund (OGEF), a targeted USD 100 million fund, supports off grid energy distribution companies and boosts their long-term capacity to access capital markets at scale.

Joao Cunha, Manager for Renewable Energy Initiatives at the African Development Bank said FEI had been developed to offer debt instruments, including in local currency, to companies providing affordable, clean and sustainable access to underserved communities in the Sub-Saharan region.

READ ALSO: ECOWAS TO BOOST REGIONAL ELECTRICITY TRADE AMONG MEMBER STATES

“Through FEI, we aim to increase co-financing and private sector investment in innovative on-grid and off-grid clean energy access solutions, and consequently move faster on our “Light Up and Power Africa (https://bit.ly/2mMCgiY) priority to achieve universal energy access in Africa by 2025,” said Cunha.

In December 2018, the Directorate-General for International Cooperation and Development of the European Commission (DG DEVCO) approved a EUR 25 million investment to FEI On-Grid window, EUR 13 million into the FEI OGEF window, and EUR 1.6 million to support the Fund’s Technical Assistance Facility, which aims to build investee capacity in structuring and executing transactions in African capital markets. These investments will provide junior equity to strengthen FEI’s capital structure, and enable FEI to fundraise from a range of commercial and private investors.

“FEI is a great example of how the EU has been developing innovative financing initiatives together with financial partners such as the African Development Bank, to stimulate and de-risk private sector investments without which we won’t be able to address the growing energy demands and provide access to sustainable energy in sub-Saharan Africa,” said Hugo Van Tilborg, Head of Infrastructure, and African Development Bank Liaison at the EU.

The European Commission’s contribution further underscores the African Development Bank’s focus on building strong partnerships with diverse organizations in order to provide a wide range of grant and investment instruments to fast track sustainable energy access across the continent.

FEI’s off-grid window reached a $58 million first close in August 2018, with contributions from the African Development Bank, the Nordic Development Fund, the Global Environment Facility, All On and Calvert Impact Capital, Shell Foundation, USAID and the UK’s Department for International Development. FEI On-Grid is currently fundraising towards achieving a first close of about $120 million.