Additional first-loss capital from EDFI ElectriFI for new climate fund
Swiss impact asset manager responsAbility Investments and EDFI ElectriFI announced their cooperation in the field of climate finance in emerging economies. Under the agreement, EDFI ElectriFI is providing additional first-loss capital for a responsAbility-managed energy debt fund targeting universal access to clean power. By further strengthening the Fund’s capital structure, responsAbility aims to mobilize additional private capital in line with SDG7.
The recently launched USD 200 m private debt fund addresses the lack of access to clean power globally with a strong focus on Sub-Saharan Africa and South and Southeast Asia. Incorporated in Luxembourg as a 10-year closed-ended structure, the blended finance vehicle targets companies that provide solutions to households without access to electricity and to businesses looking for cleaner, cheaper and more-reliable energy. Over the lifetime of the Fund, portfolio companies are expected to provide clean power to more than 150 m people, add 2,000 MW of clean energy generation capacity and reduce CO2 emissions by 6 m tonnes.
EDFI ElectriFI joins reputable public and private investors who have helped launch the Fund. By strengthening the first-loss tranche of the blended finance structure, it aims to leverage public funding to attract additional private sector capital for this important investment theme which supports the Sustainable Development Goal 7: ensure access to affordable, reliable, sustainable and modern energy for all.
Antoine Prédour, Head of responsAbility’s Climate Finance Initiatives, explained: “With the current pandemia threatening capital flows into emerging markets, it is more important than ever to raise capital and bridge the financing gap towards universal access to clean energy. Having launched the first investment fund of this scope to address both the home solar and the commercial and industrial (C&I) solar sectors, we are excited to receive the support from EDFI ElectriFI which will help us to further develop this high-impact investment universe.”
Speaking on behalf of EDFI ElectriFI, Senior Investment Officer Lionel Dieu said: “With a previous private debt fund targeting access to clean power at the origin of this new Fund, responsAbility has clearly established itself as a leading private investor in the field of energy access. The ElectriFI junior instrument unlocks more DFI funding in more senior tranches and de-risks other investors’ financing, allowing the company to extend financing to the Commercial & Industrial (C&I) and Solar Homes Systems’ sector.” Jean-Denis Collin, Regional Manager, EDFI ElectriFI, added: “With this concrete commitment, ElectriFI is strengthening the partnership with responsAbility and looks forward to explore co-investment opportunities in the future.”