AFRIGREEN DEBT FUND

Debt fund to finance companies and assets that contribute to improved access to electricity using solar photovoltaic (PV) in sub-Saharan Africa.

The fund will provide loans to finance solar PV distributed generation projects in Central and West Africa with a primary focus on Nigeria, Côte d'Ivoire, Senegal, Ghana, Mali, Cameroon. The fund will be primarily targeting the countries where grid is unreliable and electricity prices are high. The fund will offer capital in the form of project finance and asset-based debt facilities. The fund aims to build a diversified portfolio of 20-30 investments with an average ticket size of USD 4 million.

Through an investment in the Fund EIB will i) address the market gap related to the scarcity of financing for small to mid-sized greenfield RE projects in CWA region, ii) support a first-time team to raise their first fund and iii) in cooperation with an established fund manager promote the build-up of an investment platform focusing on RE investments in Africa. The role of EIB in crowding-in institutional investors to support the Fund would be important, given the perceived risk profile of the Fund's investment strategy from institutional investors' perspective. Therefore, an EIB investment would provide strong signalling support from a credible international investor with experience in the RE space and CWA region, in the absence of which the Fund would probably have difficulties reaching a first closing at minimum fund size. An EIB commitment to the Fund would also ensure the adoption of best practices in areas of sustainable development and ESG.

The Fund addresses market failures that hinder the scale-up of access to clean energy, stemming in particular from positive externalities from greenhouse gas emission reductions. This will result in a significant improvement in the economic environment and living conditions, reducing the use of polluting and expensive back-up solutions (e.g. diesel) with better and more reliable renewable energy supply at a lower cost.

The Bank will require that the fund manager ensures that all investments are compliant with EIB social and environmental standards and guidelines. The capacity of the fund manager to assess and monitor environmental and social impact and risks of the individual investments to the satisfaction of the Bank will be further assessed during appraisal.

The Bank will require the fund to ensure that all EIB-eligible investments are implemented in accordance with the Bank's Guide to Procurement.