(Agence Ecofin) – The Energy Access Relief Fund, recently created by a consortium of investors and development finance institutions, raised a total of $ 68 million for its first closure. The vehicle, managed by Social Investment Managers and Advisors (SIMA), will provide short-term loans to nearly 90 companies active in the energy sector in sub-Saharan Africa and Asia. The EARF targets companies that are still struggling to finance themselves due to the economic crisis linked to Covid-19.
Ultimately, the Fund plans to invest $ 80 million to facilitate access to energy for at least 20 million people in the targeted areas. “Together, CDC, DFC and FMO are mobilizing our capital to ensure the survival of small and medium social enterprises extending access to energy to the 800 million people living without electricity. EARF’s flexible and innovative financial structure combines different types of capital to provide low-interest loans and liquidity as the health and economic consequences of the pandemic continue, ”said Geoff Manley, head of the access and energy efficiency of the CDC group.
SIMA’s analysis of energy companies eligible for short-term financing in 50 countries found that 77% of potential borrowers need emergency financial assistance to stay afloat and avoid taking drastic measures such as suspension of operations.