The International Finance Corporation (IFC) has made a significant commitment to expanding access to clean energy in Sub-Saharan Africa. The institution has pledged up to $25 million to Acumen’s Hardest-to-Reach (H2R) Fund, a groundbreaking $200 million initiative dedicated to electrifying underserved communities across the region.
This investment aligns perfectly with the IFC’s strategic focus on supporting sustainable development in areas grappling with severe energy poverty. The H2R Fund, structured with a blend of equity tranches and a grant facility, aims to electrify a staggering 72 million people over the next decade while simultaneously mitigating 5 million tonnes of CO2 emissions.
At the heart of this initiative lies a focus on Pay-as-you-Go (PayGo) solar solutions. These innovative models empower low-income households to access clean energy through affordable, incremental payments, making it accessible even in regions where traditional grid infrastructure is either unavailable or prohibitively expensive.
Acumen, a renowned impact investment firm, has a proven track record in the off-grid solar sector. The H2R Fund builds upon this legacy by providing patient capital to social enterprises operating in 16 countries with limited access to electricity.
The IFC’s investment plays a crucial role in mitigating risks for other investors, encouraging greater capital flow into this vital sector. By taking a senior position in the fund’s capital structure, the IFC strengthens the overall investment proposition.
The H2R Fund exemplifies the power of blended finance. By combining commercial investment, concessional capital, and grant funding, this innovative model mobilizes a diverse range of resources to address the critical challenge of energy poverty.
The fund’s innovative financing structure not only addresses energy access but also fosters the long-term growth and sustainability of off-grid solar companies operating in sub-Saharan Africa. This initiative represents a significant step forward in the global effort to provide access to clean, reliable, and affordable energy for all.
