Shell Foundation and FMO to collaborate on funding renewable energy ventures
Shell Foundation and Dutch development bank FMO have signed a memorandum of understanding (MoU) to support the just and inclusive energy transition in sub-Saharan Africa and India.
The MoU builds on a previous agreement that concluded in 2019, as well as collaborations and co-investments in companies and financial intermediaries such as the Energy and Entrepreneurs Growth Fund (EEGF) and the Energy Access Relief Fund (EARF), to name a few.
The multi-year agreement will explore new climate financing opportunities, facilitate market-creating in cutting edge renewable spheres, and encourage a coordinated funding approach for the distributed renewable energy sector.
“There are currently market gaps for early-stage enterprises to access various forms of capital, which limit their growth and ability to fundraise efficiently,” said Jonathan Berman, Shell Foundation CEO. “This partnership has the potential to remove the barriers associated with the financing continuum for growth businesses in several impact sectors linked to Shell Foundation’s charitable objectives, scaling solutions serving small retail business owners, smallholder farmers and transporters of goods and people.”
“There are currently market gaps for early-stage enterprises to access various forms of capital, which limit their growth and ability to fundraise efficiently,” said Jonathan Berman, Shell Foundation CEO. “This partnership has the potential to remove the barriers associated with the financing continuum for growth businesses in several impact sectors linked to Shell Foundation’s charitable objectives, scaling solutions serving small retail business owners, smallholder farmers and transporters of goods and people.”
“This MoU can specifically support FMO in its market-creation strategy in off-grid renewable energy solutions, which is part of our Strategy towards 2030,” said Huib-Jan de Ruijter, chief investment officer at FMO. “We are excited by the potential within this MOU to bridge investment gaps, as well as designing new and innovative programmes and initiatives aimed at developing sectors and mobilising more capital into them.”
The three-year MoU will see FMO endeavour to make up to $100 million in financing available to support early to mid-stage enterprises in the focus sectors. Shell Foundation will aim to invest more than $45 million building a pipeline of high-impact and fast-growing businesses, with a provision of capacity building and due diligence support to ensure enterprises are well prepared for the FMO investment process. Shell Foundation is also contributing an additional $5 million in funding to de-risk FMO investments.