Press release: ESMAP Contributes to $68 Million Relief Fund to Protect Energy Access from Covid-19 Fallout in Vulnerable Communities

The Energy Access Relief Fund—an unprecedented partnership of 16 governments, foundations, and investors—will provide emergency capital to off-grid solar energy companies in sub-Saharan Africa and Asia.

The World Bank, through its Energy Sector Management Assistance Program (ESMAP), contributed today $2.24 million to the $68 million Energy Access Relief Fund (EARF), a facility designed to provide emergency capital to energy access companies serving more than 20 million low-income households and micro-businesses in sub-Saharan Africa and Asia. Innovative energy access companies, which are playing an increasingly important role in bridging the energy access gap, are reporting severe financial distress due to the COVID-19 pandemic. 

The EARF is funded by an unprecedented coalition of sponsors convened by Acumen, including the World Bank, IFC, the CDC Group, FMO, Green Climate Fund (GCF), IKEA Foundation, Power Africa, Shell Foundation, Sweden’s government agency for development cooperation (Sida), Swiss Agency for Development and Cooperation (SDC), The Rockefeller Foundation, USAID, U.S. International Development Finance Corporation (DFC), and UK Aid. Funding provided by ESMAP and other grant providers will play the catalytic role of enabling the continuation of financing on concessional terms to target companies. 

In some countries, mini grids and off-grid solar solutions have generated about as many connections in the last 10 years, at a lower cost, as the national grid was able to deliver in the last 50 years, but COVID-19 is now threatening to disrupt this promising trend. Broken supply chains, increased costs of solar components, households struggling to make regular energy service payments and continued COVID lockdowns have crippled the energy access industry, which provides renewable energy solutions such as mini-grids, household solar and modern energy cooking equipment to customers in low-income and last-mile communities. 

 The EARF’s emergency financing will provide short-term, subordinated loans to help alleviate these ongoing COVID-related disruptions. Contributions from grant providers to EARF will reduce investor risks, unlock concessional rates, and enable loans to more and smaller companies.  The fund aims to stabilize the renewable, off-grid energy sector by providing these companies with vital liquidity as they work to continue operations, retain staff, and recover from the economic crisis caused by the pandemic so that they can continue to deliver on their potential to provide energy to millions.

 Read the press release

 

Source: https://www.esmap.org/esmap-contributes-to-relief-fund-to-protect-energy-access