IFC backs Cygnum Capital debt fund
IFC backs Cygnum Capital debt fund
IFC signed a financing package for the Facility for Energy Inclusion, a pan-African fund that supports small-scale decentralised renewable energy projects.
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The International Finance Corporation (IFC) has signed a financing package for the Facility for Energy Inclusion (FEI), managed by Cygnum Capital, a pan-African fund that supports small-scale decentralised renewable energy projects.
IFC's financing will help fund the addition of about 115 MW of generation capacity in about 15 African countries, including the Democratic Republic of the Congo, Ghana, and Kenya. FEI provides debt financing for small-scale renewable energy generation and storage projects to power commercial and industrial companies, telecom infrastructure as well as mini grids.
The $80 million financing package comprises a loan of $30 million from IFC; a loan of $20 million mobilised from the Managed Co-Lending Portfolio Program (MCPP), which will enable longer-term financing that is not readily available in the market; and up to $30 million in blended finance.
The blended finance package includes $15 million from the International Development Association's Private Sector Window Blended Finance Facility and $15 million from the Finland – IFC Blended Finance for Climate Program.
"This is a major milestone for FEI which is now recognised by key market players as a lead lender in the decentralised renewable energy market in Africa with $220 million commitments across 23 countries to date," said Orli Arav, head of debt funds at Cygnum Capital Asset Management. "The partnership with IFC including a $20 million tranche from institutional investors represents a vote of confidence to Cygnum Capital as a leading fund manager."
"Our partnership with FEI will help support the development of Africa's decentralised renewable energy market and attract local and international private investment, strengthening the sector's capacity to reach commercial viability and scale," said Sarvesh Suri, IFC's regional industry director for infrastructure and natural resources in Africa. "With approximately 600 million people across sub–Saharan Africa without access to electricity, the decentralised renewable energy market offers a viable solution to expanding access to electricity across the continent by offering affordable and climate friendly energy solutions."
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