Behind the Energy Entrepreneurs Growth Fund
The EEGF is a critical vehicle for helping to reach the UN Sustainable Development Goal 7 and deliver universal energy access to all. This is a particularly difficult challenge in Sub-Saharan Africa (SSA), where an estimated 579 million people do not have access to electricity, but a challenge the EEGF is willing and able to take on.
Initiated in 2019 by Shell Foundation and FMO with a USD 120 million target, the EEGF provides catalytic financing for early and growth-stage companies in Sub-Saharan Africa operating in the access to energy space. EEGF has made its first three investments in 2021, totaling USD 10 million in off-grid solar providers in Sub-Saharan Africa.
The EEGF is a unique fund designed to offer patient, risk-tolerant, and flexible capital, combined with targeted technical assistance to entrepreneurs. Managed by Triple Jump, Persistent acts as an investment advisor to the fund, spanning deal sourcing and deal due diligence, which helps to better understand the target companies once the fund considers them as a potential investment. This means understanding the quality of the companies’ teams, their traction, technology, financial position, promise and need, and the competitive context and opportunity in which they operate. In addition, Persistent also provides targeted technical assistance to support their sustainable growth.
Persistent Venture Builder Toukam Ngoufanke said about what makes him most proud of EEGF, “The quality of the team we work with at EEGF, the value of the expertise we bring to the fund’s deal due diligence, and of course, the impact of the work to enable access to growth-driving debt to energy entrepreneurs. It all makes it quite a fun fund to work with. It is electrifying work!”
EEGF supports all types of companies operating in the access to energy value chain, aiming to contribute to the development of the entire off-grid energy ecosystem. It will finance more than 25 companies and provide tailored solutions to meet the changing needs of growing energy companies, through (mostly) mezzanine structures, as well as equity and debt investments. Over the life of the fund, EEGF expects to reach 5.4 million households and businesses, and avoid the emission of 4.5 million tonnes of CO2.
¨Working alongside Persistent, the EEGF will achieve meaningful impact, and positively change the lives of millions of people in SSA. By providing flexible capital and combining it with expert technical assistance, we can address what is currently lacking in the off-grid energy ecosystem. Our close collaboration with Persistent allows us to continue to support the sector and help achieve universal energy access by 2030.¨ says Jan-Henrik Kuhlmann, Head of Climate and Nature at Triple Jump.
This January FinDev Canada and its 2X Canada facility announced the participation of up to US$ 13 million in the Energy Entrepreneurs Growth Fund. The use of blended finance will allow EEGF to unlock additional capital, a greater challenge during the COVID-19 crisis, and further its positive impact in improving access to energy and advancing women’s economic empowerment. You can read the full press release here.
The EEFG is not the only partnership Persistent holds with Triple Jump. In a consortium with Triple Jump and GreenMax Capital Advisors, Persistent has been awarded a mandate to provide management services to the Clean Energy and Energy Inclusion for Africa Foundation (CEI Africa). The aim of the foundation, set up by KfW with 49 million euros in December 2021, is to supply climate-friendly electricity for people in sparsely populated areas of Sub-Saharan Africa. Read the full press release here.
Moving forward, the strong and complementary partnership between Triple Jump and Persistent will continue to help the EEGF and CEI Africa Foundation grow, addressing important gaps in the energy access sector and providing a bridge towards bringing in commercial scale-up investors.