ENERGY ACCESS VENTURES FUND
Status: Approved investmentWhy disclosure?
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Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our customer
Energy Access Ventures Fund (“EAVF” or “the Fund”) is an investment fund focused on providing (off grid) energy access and its benefits to the un(der)served in Sub-Saharan Africa. The Fund is formally managed by Aster Capital Partners SAS and is advised by Energy Access Ventures SAS. EAVF had its first and final close in March 2015 at EUR 55m, with investments from Schneider Electric, CDC, EIB, Proparco, AFD (FFEM), and OFID. FMO is invited to join a subsequent close up to a total Fund size of ~EUR 80m. This provides a unique opportunity for FMO to invest in an existing operational team with deep market knowledge and expertise in the off-grid space, which is an increasingly relevant sector for FMO.
What is our funding objective?
EAV is a pioneer in the off grid / access to energy sector and has to date built up an initial portfolio of six companies, including: three Solar Home Systems companies, a ‘gas for-cooking’ start-up and two ‘energy for agriculture’ businesses (solar irrigation and solar-based cold storage). EAV targets somewhere between 15-20 investees in order to secure sufficient diversification. FMO’s commitment will be deployed both in new investments as well as in (follow-on) investments in existing portfolio companies.
Why do we fund this investment?
This investment perfectly fits FMO’s Green and Inclusive goals and it further allows FMO to gain exposure to the dynamic and rapidly expanding off grid energy market. Distributed (solar) power generation has opened the doors for electrification throughout Africa, a continent where still only ~35% of the people is connected to the grid (and many more suffer from poor quality supply). Off grid solutions allow inclusive development through providing access to energy for un(der)served people at the Base of the Pyramid and support creating industrial and/or agricultural jobs in underserved areas. The Fund invests in companies providing renewable energy via for instance solar-powered systems and micro renewable energy generation units.
What is the Environmental and Social categorization rationale?
From an E&S risk perspective, the Fund’s investment scope contains both category C activities (like selling/installing home solar systems) and category B companies (mini-grids, equipment manufacturing, small biomass projects). Therefore, the E&S risk categorization is B for the Fund. The Fund has a fully functional environmental & social management system in place. The Fund develops ESG risk assessments and environmental & social action plans for all of its investees. As the Fund is targeting small-scale inclusive investments not many high-risk investments are expected, which is confirmed by the current portfolio and pipeline.
More investments
| Date | Total FMO financing |
|---|---|
| 12/20/2017 | EUR 2.50 MLN |
- Region
- Africa
- Country
- Africa
- Sector
- Energy
- Effective date
- 12/20/2017
- Total FMO financing
- EUR 7.50 MLN
- Funding
- AEF-I
-
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk
Environmental & Social Category
(A, B+, B or C) - B