Shell Foundation and FMO Back Green Energy Initiative in Sub-Saharan Africa
The African continent is super-wealthy when it comes to renewable energy sources like sun, water, and wind. While these riches are not being used to their full capacity, philanthropists in Africa are beginning to take the necessary steps to finally start shaping the continent’s renewable energy sector. The Shell Foundation and the Dutch Development Finance Company (FMO) have joined forces to launch a brand-new financing fund with the goal of providing much-needed backing to renewable energy vendors throughout sub-Saharan Africa. The fund is called the Energy Entrepreneurs Growth Fund (EEGF) and is aimed at assisting energy suppliers in the region.
Improving Access to Electricity Where It’s Needed Most
The Shell Foundation and FMO are both known as African philanthropists with a strong presence in the energy sector on the African continent. By starting the Energy Entrepreneurs Growth Fund, these two organisations are hoping to improve access to renewable electricity sources across sub-Saharan Africa. To achieve this, the fund has made a starting amount of $120 million available. This generous sum will be managed by Triple Jump, an investment fund management company located in Amsterdam. Switzerland-based off-grid firm Persistent was appointed to serve as investment advisor to EEGF. Triple Jump and Persistent were both appointed by The Shell Foundation and FMO to manage the initial funding.
The Fund’s Main Beneficiaries
The main recipients of funding by the EEGF will be companies that are in the growth stage and that specialise in providing electricity supply options derived from renewable sources to local households and small to medium-sized enterprises. According to the Shell Foundation and FMO, the fund will be instrumental in improving the energy situation across the African continent.
The Need for Renewable Energy in Africa
According to a recent research study conducted by the Organisation for Economic Co-operation and Development, the sub-Saharan Africa region has the lowest rate of access to energy in the entire world. There are over 600 million individuals and over 125 million households that simply do not have electricity or access to any modern energy services. Over the years, this lack of basic resources has had a disastrous effect on the sustainable development of the area on all fronts, including economic growth.
A 12-Year Plan
Over the next 12 years, the EEGF will offer flexible loans to 25 renewable energy companies as well as technical assistance in order to successfully navigate the unique ecosystem of off-grid energy. This will give them bespoke solutions geared towards the evolving needs of contemporary energy companies as well as mezzanine structures and debt and equity investments.
The Future Is Brighter
When the energy sector in sub-Saharan Africa further embraces renewable energy sources, costs will be reduced, health will be improved, and there will be an increase in available jobs, not to mention a drastic improvement in the environment. African philanthropists like Shell Foundation and FMO are paving the way for this to become a reality.