Stockholm (NordSIP) – The Nordic Development Fund (NDF), the joint development and climate finance institution of Denmark, Sweden, Norway, Finland and Iceland, has partnered with the African Development Bank, the Global Environment Facility and Calvert Impact Capital in a USD 55 million investment into an Off-Grid Energy Access fund.
The fund, known as “FEI OGEF” (Facility for Energy Inclusion Off-Grid Energy Access Fund), will support an initiative from the African Development Bank called the “New Deal on Energy for Africa” and is a ‘blended finance debt fund designed to provide loans in local and hard currencies to off-grid energy companies with the dual objectives of scaling up access to clean electricity for off-grid households and crowding in local financial institutions as co-lenders’.
The Nordic Development Fund will provide a €6 million investment, along with a €0.5 million grant for technical assistance to support deal structuring and capacity development.
The objective of the African Development Bank project is to connect 75 million households through off-grid energy access solutions by 2025, with the fund designed to result in a reduction of up to 8 million tonnes of CO2 emissions across its life span. The fund will initially focus on East Africa, Côte d’Ivoire, Ghana and Nigeria, and will be managed by Lion’s Head Global Partners operating out of Nairobi, Lagos and London.
The Nordic Development Fund itself has committed over €45 million to co-financing a broader joint portfolio of operations with the African Development Bank.
“This initiative highlights the close and constructive working relationship between NDF and the African Development Bank. We have been in lock step throughout the preparation and development cycle of the fund,” said NDF Managing Director Pasi Hellman. “Now we have a fully packaged investment vehicle to bring to market scaling up proven clean off-grid energy solutions to the energy access challenge on the continent.”
Established in 1988, the Nordic Development Fund is headquartered in Helsinki, Finland, in the same building complex as the Nordic Investment Bank and the Nordic Environment Finance Corporation. Mr. Hellman is responsible for the conduct of day-to-day operations.
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