TEA partners have come together to back launch of $80 Million Relief Fund to Protect Energy Access in Vulnerable Communities from COVID-19 Fallout.
On the road to reliable, affordable and sustainable energy for all, partnerships have been critical to driving progress. Partnerships are key to the success of the TEA programme – addressing a range of research and innovation challenges, and maximising the potential for commercialising new technologies through partnerships across the energy access ecosystem.
In the face of the challenges and setbacks that COVID-19 continues to present, a new and important role for partnerships has also emerged – to protect and continue the progress that has been made in energy access, bridging the gaps that the crisis has created.
The Energy Access Relief Fund is an unprecedented coalition partnership of 16 governments, foundations and investors and aims to provide essential financial support to energy access companies in sub-Saharan Africa and Asia. The first-of-its-kind relief fund launched on September 1st with a first close of $68 million against an ultimate target of over $80 million to protect energy access for at least 20 million people.
The Energy Access Relief Fund (EARF) is the culmination of an unprecedented partnership convened by Acumen, with multiple TEA partners playing a significant role in its creation. The EARF includes CDC Group, U.S. International Development Finance Corporation (DFC), FMO, Green Climate Fund (GCF), Shell Foundation, IKEA Foundation, The Rockefeller Foundation, World Bank, International Finance Corporation (IFC), Swedish International Development Cooperation Agency (SIDA), Swiss Agency for Development and Cooperation (SDC), UK aid, USAID, and Power Africa. The EARF, managed by Social Investment Managers and Advisors (SIMA), will provide relief capital in the form of short-term loans to an estimated 90 energy access companies in sub-Saharan Africa and Asia still struggling with disruptions wrought by COVID-19.
Access to clean, reliable, and affordable energy is essential in lifting communities out of poverty. We could see that the pandemic was adversely impacting those who were most vulnerable, and that we needed to take action. We couldn’t do it alone — it would take all of us. The launch of the EARF illustrates the power of partnership and moral imagination in a time of crisis.Jacqueline Novogratz, Acumen’s Founder and CEO
Broken supply chains, increased costs of solar components, and continued COVID lockdowns have crippled the energy access industry, which provides renewable energy solutions such as solar lanterns, household solar, mini-grids, and modern energy cooking equipment to customers in low-income and last-mile communities. A coalition of committed global investors and donors created the Fund to protect the industry’s progress toward United Nations Sustainable Development Goal 7: universal energy access.
SIMA’s analysis of energy access companies eligible for relief funding across 50 countries shows that 77% of potential borrowers require emergency financial assistance to stay afloat. Without it, many companies may be forced to take drastic measures such as pausing operations, laying off staff, or permanently closing their doors, which would disrupt energy access for customers at a particularly difficult time.
The EARF is an extraordinary example of stakeholders uniting in crisis, even as budgets were constrained and investments were at risk. We have proudly worked alongside IKEA Foundation, The Rockefeller Foundation, IFC, UK aid, USAID, and the World Bank to leverage our collective grant capital to de-risk and catalyze senior investors in the Relief Fund. Small-scale renewable energy enterprises and innovators are scrambling to serve some of the world’s poorest communities. We hope similar collaborations follow this sector landmark — much more capital will be needed in the coming months to continue progress toward universal energy access.Sam Parker, Director at Shell Foundation
Through creativity, financial innovation, and fiscal discipline, the Energy Access Relief Fund (EARF) intends to protect social enterprises that combat energy poverty and are leading the renewable energy transition across sub-Saharan Africa and Asia.
The EARF aims to safeguard gains made in the once-booming energy access sector. In the last decade, the industry has grown six-fold, providing 470 million people with energy access, employing more than 370,000 in green jobs and avoiding 74 million tonnes of greenhouse gas emissions.
Within this overall impact, the TEA programme has improved access to clean energy for 9.5 million people, created 74,589 sustainable long-term jobs in the clean energy market and avoided 979,035 tonnes of CO2 as a result of programme activities to date. Through their contributions to the EARF, TEA partners are helping to ensure this impact can continue.