US, Shell to provide $145mn to support Africa’s private power sector
The US Development Finance Corporation (DFC) and the Shell Foundation have signed a partnership to strengthen their investments in renewable energy in Africa and Asia.
The two partners will invest $145mn by 2025 to support the African private sector, particularly small electricity producers who install clean energy systems in rural areas.
As part of the partnership, DFC is committed to providing $100mn in debt and equity to support early stage companies.
The Shell Foundation aims to deploy more than $45mn in grants by 2025 to build a network of high-growth, high-impact businesses that provide distributed renewable energy (DRES) to households, farmers and businesses in off-grid areas in Africa and Asia.
The new partnership “has the potential to expand the pool of investment opportunities that DFC can make by providing deeper connections to a portfolio of energy investments that the Shell Foundation has built in tandem with the UK Foreign, Commonwealth and Development Office (FCDO), Power Africa and the US Agency for International Development (USAID) over the past five years – and by providing information, co-financing and guarantees that reduce the risk of supporting new types of businesses in emerging sectors,” said DFC.
Through this partnership, the DFC also wants to give a boost to the Power Africa initiative launched in 2013 by former US President Barack Obama, with the aim of generating 30,000 MW to electrify 60mn homes and businesses in Africa.
The financial institution also wants to focus its partnership with the Shell Foundation on the economic empowerment of women, through the growth of social enterprises that provide essential renewable energy services to people living on $2 to $10 a day in off-grid areas.
“We are delighted to work with the Shell Foundation to help companies grow through commercial financing, a sign of long-term sustainable development, while prioritising women’s economic empowerment and supporting economic growth as countries continue to respond to the [coronavirus] COVID-19 pandemic,” said Dev Jagadesan, acting CEO of the DFC.