The Facility for Energy Inclusion’s Off-Grid Energy Access Fund (OGEF) has been structured by Lion’s Head in partnership with the African Development Bank and Nordic Development Fund. OGEF offers a flexible, pragmatic and context driven approach to transaction structuring, provides local currency options to reduce risk for borrowers and their customers, and help create lasting local capital markets participation in the sector. As with the ALCBF, OGEF also provides technical assistance to companies to support market development. OGEF, with a target size of $100-150m, raised $58m at first close in August 2018, and is now actively investing.
The African Local Currency Bond Fund (ALCBF) was conceived by KfW to address the current underdevelopment of local currency bond markets in Africa. The fund focuses on improving access to long-term funding in local currency, strengthening the capacity of local markets, and creating opportunities for local investors by acting as an anchor investor. The ALCBF also provides technical assistance for local currency bond issuances by financial service providers and companies operating in developmental sectors. To date, the fund has invested over US$90mm in 20+ companies across 14+ African countries in sectors such as financial inclusion, agriculture, housing and renewable energy sectors.
The Facility for Energy Inclusion has been particularly designed to support small-scale Independent Power Producers (IPPs), mini-grids and captive power projects by providing various debt products, including corporate and project loans, construction/bridge loans and mezzanine finance, in both hard and local currencies. Focusing on smaller facility it envisages bringing electricity to smaller countries or regions that are not adequately serviced by the main grid. Eligible investments are projects using renewable energy technology with capital expenditures of less than US$ 30 million and a capacity below 25MW.