A Shell-founded startup fund has received $13 million from a Canadian DFI to help Africa get access to renewable energy

Energy Entrepreneurs Growth Fund (EEGF), which invests in early and growth-stage energy entrepreneurs in Sub-Saharan Africa, has received a $13 million injection from FinDev Canada. A portion of the funds will be used to improve off-grid homes and businesses access to sustainable energy in the area.

The $120 million EEGF, which was co-founded by the Shell Foundation in 2019 and is co-funded by UKaid and the Dutch Entrepreneurial Development Bank FMO, provides loan (catalytic or mezzanine) or equity financing to energy-related firms. Triple Jump, an impact investment manager, is in charge of the EEGF, which is advised by Persistent, a climate venture builder.

FinDev Canada helped raise funds via 2X Canada, an impact investment facility that helps low-income and disadvantaged people in Sub-Saharan Africa, Latin America, and the Caribbean achieve economic empowerment.

According to Paulo Martelli, vice president, and chief investment officer of FinDev Canada, the cash will assist boost innovation in the renewable energy market after the Covid-19 slowdown.

“The epidemic has hampered Africa’s electrification, which was already lagging before the health crisis. FinDev Canada and its 2X Canada facility support energy companies committed to expanding access to clean and reliable energy for African households and businesses, resulting in inclusive and sustainable growth and the improvement of millions of lives, by increasing EEGF’s capacity to invest in this sector.

The fund invests from at least half of firms that specifically address the energy requirements of African women consumers and entrepreneurs, as well as companies that provide sustainable energy solutions for businesses and families. Sub-Saharan Africa is expected to have 75 percent of the world’s population without access to power, and renewable energy technologies might help close that gap.

“Understanding the funding requirements of entrepreneurs, who we rely on to meet the world’s energy access targets, is critical for an equitable and inclusive energy transition that alleviates energy poverty and mitigates climate change,” said Shell Foundation operations director Gareth Zahir-Bill.

“FinDev Canada’s investment in the fund will enable it to extend its offer of flexible financing options for businesses, allowing millions of people in Africa to get access to clean and dependable electricity sooner.”

The EEGF made investments in Baobab+ and Yellow, both of which provide pay-to-own solar energy solutions, as well as Redavia, a company that develops and installs mobile solar farms for enterprises, last year.

The firm provided a $3.7 million mezzanine investment to Redavia, which has customers in Ghana, Kenya, and Tanzania. The company hopes to deploy more than 85 megawatts of solar electricity throughout Africa. It had erected “near to 90 solar units, totaling 7 MWp of solar power” by September of last year.

Yellow earned $4 million, while Baobab+ received $2.3 million. Yellow has operations in Malawi and Uganda and enables families and small companies to pay for solar systems in installments. Baobab+ now operates in Mali, Senegal, Madagascar, and Côte d’Ivoire, with plans to expand into Nigeria and the Democratic Republic of Congo in the near future.