The International Finance Corporation (IFC) has committed up to $25 million to Acumen’s Hardest-to-Reach (H2R) Fund, a $200 million initiative focused on improving energy access in underserved regions across Sub-Saharan Africa. This investment forms part of the IFC’s broader strategy to drive sustainable development in areas with significant energy poverty.The H2R Fund aims to electrify 72 million people over the next decade while preventing 5 million tonnes of CO2 emissions. It is structured into three $60 million equity tranches—senior, mezzanine, and junior—and includes a $20 million grant facility. The IFC’s investment has been allocated to the senior tranche, helping reduce risks for other investors and encouraging additional capital flow into these critical regions.Targeting off-grid solar companies in 16 countries with low electrification rates, the fund prioritizes Pay-as-you-Go (PayGo) solar businesses. These companies offer solar home systems through affordable, incremental payments, making clean energy accessible to low-income households in areas where traditional grid infrastructure is either expensive or unfeasible.A unique feature of the fund is its use of grants to incentivize solar companies to reduce interest rates for end-users. This is tied to specific key performance indicators (KPIs), such as the number of first-time electricity users reached, ensuring the investments deliver measurable social and financial returns.One beneficiary of the H2R Fund is Yellow Malawi, which secured a $2 million investment through a blended-currency loan. The funding will enable the company to expand its services to approximately 182,000 people, furthering the fund’s mission of addressing energy poverty in underserved markets.
Acumen, a nonprofit impact investment organization, has a strong legacy in the off-grid solar sector, deploying patient capital to support social enterprises. The H2R Fund builds on this track record, utilizing a blended finance model that combines commercial investment, concessional capital, and grants. This approach not only addresses energy poverty but also promotes sustainable business growth and contributes to global climate goals.The IFC’s participation underscores its dedication to impact-driven capital as a means of fostering development in regions with critical infrastructure needs. Through innovative financing structures, the H2R Fund exemplifies how targeted investments can create lasting change, bridging gaps in energy access while supporting the growth of off-grid solar companies in Sub-Saharan Africa.
