COVID-19 Energy Access Relief Fund

Provide short-term liquidity to enable up to 90 primarily small and medium-sized energy access companies to remain solvent for the loan duration. As the sector is nascent and still largely pre-profit, without emergency funding a large proportion of otherwise financially and operationally-sound firms are at risk of insolvency due to prolonged COVID-19 related liquidity challenges.

Pan-Africa and Asia

Primarily sales and distribution, installation and maintenance, and call-centre agents. Over half of in-country employees in the sector reside in rural areas, 61 per cent are lower-skilled workers and 27 per cent are women.

Pan-Africa and Asia

Predominantly rural and low-income, with 41 per cent of solar home system customers and 51 per cent of mini-grid customers living below $3.20 per day. 35 per cent of customers are female. The main sources of income for energy access customers are self-employment in agriculture and other informal jobs.

We expect the fund will help to safeguard energy access for up to 3.3 million households and up to 12,400 full-time equivalent in-country jobs in recipient companies over the loan duration.

Depth: Surveys indicate that 61 per cent of solar home system customers and 54 per cent of mini-grid customers report significant quality of life improvements because of improved energy access. 7 per cent and 26 per cent of solar home system and mini-grid customers respectively, also report using their energy access for productive use, resulting in potential time saving and/or income generation.

Financial additionality: High financial additionality due to high uncertainty and limited risk appetite among commercial investors for both the sector and market. We have taken a leadership role in the fund's development, including defining strategy, underwriting criteria, governance framework and driving fundraising.

External Risk

Relates to the risk that this funding is insufficient to meet the severity and/or duration of liquidity challenges experienced by recipient companies, and so fails to prevent insolvencies and ensuing job losses and loss of energy access for customers. Correlates with commercial risk and partially mitigated by eligibility criteria to screen out businesses that were already in financial stress pre-COVID-19 pandemic and/or are less well-established.

Alignment Risk

Relates to the risk that recipient companies do not use proceeds as intended to cover local operating costs and staff expenses, e.g. instead using funds to bail out or subsidise existing investors or lenders. Correlated with commercial risk and mitigated by covenants restricting use of proceeds to local operating and staff costs.

Unexpected Impact Risk

Relates to the risk that recipient companies do not take adequate measures to protect poor and vulnerable consumers and therefore have unintended adverse impacts on customers’ wellbeing. This is mitigated by companies being required to commit to the GOGLA Consumer Protection Code, and report on consumer protection practices at the application stage and bi-annually thereafter to be eligible for funding.