EU-EDFI PRIVATE SECTOR DEVELOPMENT FACILITY EEDF

Promoter – Financial Intermediary

EFP and ICCF members

Location

• Regional - Africa

Description

This facility will provide, from the resources of the 10th European Development Fund (EDF), guarantees (partial credit guarantees - PCGs) of up to EUR 43.2m, administered by the EIB on behalf of the EU and technical assistance (TA) of EUR 5m for early stage projects, to private sector investment projects in the energy sector in Sub-Saharan Africa that are eligible under the Sustainable Energy for All (SE4All) initiative.

Objectives

Through the implementation of the EU-EDFI Private Sector Development Facility (EEDF), the financing institutions that make up the European Financing Partners (EFP) and the Interact Climate Change Facility (ICCF), in collaboration with the European Commission, would address the overall objective of reducing poverty and promoting economic development in Sub-Saharan Africa, and more specifically, increasing access to modern energy services, and promoting investments in renewable energy and in energy efficiency projects.
To achieve this, EEDF grant finance would leverage EFP/ICCF loan or equity finance in a new risk-sharing mechanism to address SE4All objectives in the following way: under EFP/ICCF the EDFIs and the EIB may consider to support private sector projects in the energy sector that address the objectives of SE4All but that are either at an early stage of development and/or have a higher risk profile than would normally be acceptable to them. In addition, TA would be available under the EEDF, to support feasibility studies, capacity building and advisory services, and/or provide a guarantee to the EFP/ICCF Financing Partners in order to facilitate the mobilisation of loan or equity finance to high impact projects in terms of SE4All objectives that are high risk and may otherwise not be acceptable for funding. Both TA and guarantees thus would provide significant additionality to financing partners’ portfolios.
The EIB would manage the facility on behalf of the EC. All decisions will be taken by either the EFP or the ICCF Investment Committee, in which the Commission will be represented.

Sector(s)

• Credit lines

Proposed EIB finance (Approximate amount)

EUR 43 million

Total cost (Approximate amount)

Not applicable.

Environmental aspects

Eligibility criteria under SE4ALL:
- The project must be an investment project aligned with at least one of the following objectives: energy access, energy efficiency, as well as renewable energy.
- Notably, the object of investment can be access to energy, rural electrification, clean cooking, and energy efficiency. Projects can take place in rural, peri-urban and urban areas.
- Except for rural electrification, an investment project for energy access should provide additional services to at least 50,000 beneficiaries.
- A rural electrification investment project should provide access to at least 10,000 beneficiaries.
- The recipient must commit to applying proper consultation mechanisms, building on international best practice, with local communities and indigenous people in the area of environmental and social impact. Proper impact assessments and consultation mechanisms will be applied in the area of large infrastructure projects.

Procurement

The procurement of any goods, works or services and the award of grants by EIB and the promoting partners in the context of the EU-EDFI Facility will be carried out in accordance with the applicable rules and procedures adopted by EIB.
The procurement of goods, works and services financed using the proceeds of any Guaranteed Financing shall, where the goods, works or services are procured by the project company or by any other person not a party to the EU-EDFI Agreement, be carried out in a manner compliant with the relevant provisions of the operational guidelines scheduled to the EFP Master Investment Agreement or the ICCF Master Investment Agreement, as applicable.

Status

Signed - 20/08/2014