Multinational - Facility for Energy Inclusion (FEI)

The Project entails the design, structuring, and implementation of a USD 500 million debt fund, the Facility for Energy Inclusion (FEI). Working through a streamlined platform and a highly specialized team, the Facility seeks to alleviate the barrier of lack of access to debt financing faced by small scale renewable energy projects, thus increasing the flow of capital to the energy sector in Africa. FEI will support projects with financing needs that are less than what is currently required to justify the high transaction costs associated with the lending platforms of most DFIs, and financing requirements that are not adequately satisfied by local commercial banks due to a number of factors including risk perception and the dearth of suitable financing models (e.g. receivable-based financing). It will focus on providing senior and mezzanine debt financing to small scale projects (off-grid, mini-grid and on-grid) with total costs not exceeding USD 30 million. The Facility will operate with loan structures and pricing commensurate with risk profiles of projects and on a platform conducive to the efficient execution of deals, in accordance with evolving market needs. Unlike other debt funds proposed in the market, the Facility constitutes a direct lending platform. Although FEI does not seek to deploy funds through local financial intermediaries, through its demonstration effect and financial performance, FEI may support the continent’s local commercial banks and other financial intermediaries in their efforts to “bank” the sector.