Almost two billion people worldwide lack a reliable source of electricity, and because many of these people live in remote communities, off-grid power is one of the most promising sources of expanding access to affordable and clean electricity. However, the COVID-19 pandemic has resulted in dramatically reduced sales of off-grid electricity, as well as disrupted supply chains and tightened liquidity, which has threatened the commercial viability of many off-grid energy providers.
Solution and Impact
DFC financing is supporting the Energy Access Relief Fund, which is providing low-cost loans to viable off-grid energy providers that serve low-income communities across 50 countries in Africa and Asia but are facing liquidity challenges due to COVID. Energy Access Relief Fund is a collaboration of development institutions, donors, and impact investors including the Dutch development agency FMO, the U.K. development agency CDC Group, as well as the World Bank, the International Finance Corporation, Rockefeller Foundation, and Shell Foundation. The fund plans to deploy up to $100 million of financing to small and medium businesses providing a variety of off-grid energy solutions including solar home systems, clean cookstoves, and solar-powered irrigation.
In addition to providing critical support for many of the SMEs that have suffered liquidity squeezes during the pandemic, the fund is helping to ensure continued supply and expansion of off-grid energy to remote and low-income communities.
The majority of loans will be focused on low and lower-middle income countries.