MIROVA GIGATON FUND LCFP

The project consists in a debt fund targeting small and medium sized enterprises (SMEs) active in the generation and provision of clean energy in emerging markets, with a focus on sub-Saharan Africa.

The Fund aims to provide debt support to SMEs that generate and provide clean energy, primarily in Sub-Saharan Africa and South East Asia. The Fund has a focus on companies with positive climate, sustainability and gender impact in line with the objectives set out in EIB's Climate Bank Roadmap and Climate Action and Environmental Sustainability objectives. The Fund will contribute towards a number of sustainable development goals including SDG 7 (Affordable and Clean Energy), SDG 5 (Gender Equality) and SDG 13 (Climate Action).

The operation concerns an investment in the Mirova Gigaton Fund, a USD 500m investment fund targeting companies in Africa and, to a lesser extent, on Asia Pacific, Latin America, and MENA regions. The operation is in line with EIB's Climate Action & Environmental Sustainability (CA&ES) objectives outside the EU, as it supports climate action projects in the energy space. Moreover, the investments will contribute to local private sector development, development of social and economic infrastructure (transport, energy, environment), and climate change mitigation. In addition, the Fund Manager meets the 2X Challenge entrepreneurship and leadership criteria demonstrating full commitment towards gender equality.

The Fund will invest primarily in distributed solar PV energy solutions (e.g. solar home systems, off-grid and mini-grid systems). The operation addresses the constrained access to finance for SMEs which stems from the market failure of asymmetric information and the high credit risk of the final beneficiaries. It rests on strong strategic alignment with EU and EIB policy priorities. The financing of this project also contributes to Bank's lending priority objectives on Energy (Renewable Energy) as well as on Climate Action (transversal), Environmental Sustainability (transversal).

The investment is expected to have a significant positive social impact on final beneficiaries composed of low-income households and SMEs without access to reliable grid power. The operation will also result in a significant improvement in the economic environment and living conditions, reducing the use of polluting and expensive generation with better and more reliable renewable energy supply at a lower cost. The junior commitment under LCFP is expected to trigger the commitment from other investors and to have a strong catalytic effect. The Fund's terms and conditions are expected to be negotiated in line with best market practice standards.

The Fund's operational guidelines will provide for environmental and social due diligence of investee companies according to guidelines acceptable to the EIB.

The Fund is expected to comply with the EIB's procurement guidelines.