French fund manager RGREEN INVEST and investment adviser ECHOSYS INVEST said on Friday that a new investment fund with 87.5 million euros ($92.63 million) will finance solar power production across Africa, with a concentration on West and Central Africa.
According to the announcement, the first close of the AFRIGREEEN Debt Impact Fund would fund on- and off-grid solar power facilities for small- and medium-sized commercial and industrial clients across the continent. RGREEN INVEST and ECHOSYS INVEST said in the statement that, the European Investment Bank (EIB) and the International Financial Corporation made commitments for the first closing (IFC).
French banks Societe Generale and BNP Paribas completed the first round of funding, the statement said. The group is aiming to raise a total of 100 million euros from development finance institutions and private investors.
The project aims to provide direct lending and asset-based debt facilities for regional and international developers and African commercial and industrial companies to develop solar infrastructure.
The groups seek to build a portfolio of 20 to 30 investments, with an average investment size of 5 million euros over an eight to ten-year period, to cover their long-term debt financing needs of between 10 and 15 million euros. The International Development Association’s Private Sector Window Local Currency Facility is used to support the fund’s offer of long-term local currency finance in Ghana and Nigeria.
The Fund’s effect goals will be measured in terms of megawatts (MW) installed, megawatt-hours (MWh) produced, tonnes of CO2 emissions and litres of fuel avoided, as well as the number of enterprises that directly or indirectly use innovative funding channels.
The extent of the effect will also be assessed by the number of commercial and industrial businesses that are able to modernise their power producing facilities.