The African Guarantee Fund (AGF) announced on Wednesday the launch of its local currency guarantee mechanism, dubbed “Mission 300,” which can boost access to energy.
Amounting to $5 billion, the Mission 300 initiative was launched to support energy access projects in Africa, specifically focusing on financing small and medium-sized enterprises (SMEs) operating in the distributed renewable energy (DRE) sector.
This new facility is part of a broader initiative by the African Development Bank (AfDB) Group and the World Bank Group to provide electricity to 300 million Africans by 2030, according to a statement received by APA.
The continent faces a major challenge in terms of energy access, with approximately 600 million people without electricity in 2023. The annual investment needed for universal energy access by 2030 is estimated at $25 billion.
“The ‘Mission 300’ Local Currency Guarantee Facility will encourage collaboration with African governments while leveraging concessional financing from the African Development Bank, the World Bank Group, and
other development partners to increase the participation of local banks in financing distributed renewable energy solutions,” said Wale Shonibare, Director of Energy Financial Solutions at the AfDB and Non-Executive Director of the AGF.
The Green Guarantee Facility, launched by the AGF before Mission 300, has already mobilized financing for green and renewable energy projects,
strengthening the confidence of financial institutions and accelerating electrification, particularly in rural and semi urban areas. It has also helped to overcome obstacles such as high collateral requirements and long-term financing gaps.
AGF Group CEO Jules Ngankam stated that AGF plays a key role in facilitating financing for SMEs in the sector, thus contributing to Africa’s energy transition while reducing carbon emissions across the continent.
A recent example of AGF’s impact is its participation in the loan syndication for a 40 MW solar power plant in Madagascar. This project, which improves access to electricity for approximately 285,000 people,
also contributes to the reduction of CO2 emissions, supporting the United Nations Sustainable Development Goals.
ODL/sf/ac/lb/gik/APA