Delivered by leading advisory firms, the new service will help to bridge the access-to-finance gap for local, earlier stage companies in sub-Saharan Africa, the Caribbean, and the Pacific.
On the COP26 Energy Day, the European programme GET.invest – supported by the European Union, Germany, Sweden, the Netherlands, and Austria – is officially launching the pilot phase of the GET.invest Finance Readiness Support, a new offering to help locally-owned and managed energy access companies, particularly in sub-Saharan Africa, access finance.
Across market segments, these companies tend to face significant barriers in tapping into funding opportunities, not least due to their track record, size and financing requirements. This is mirrored in global market trends. Investments in the off-grid solar sector have been highly concentrated, with the top 10 recipients of financing receiving 80 percent of the total value of investment in 2020 (GOGLA Off-Grid Solar Investment Trends 2020). This access-to-finance gap is a major roadblock for universal energy access, as 84% of people without access to energy live in rural areas and could benefit from companies with deep distribution roots and knowledge of local customer preferences. Furthermore, small and medium sized companies (SMEs) in emerging markets are widely considered key engines of growth, job creation and economic development.
Building on broad stakeholder consultations as well as the experience of supporting over 200 companies and projects in the sustainable energy sector, GET.invest launches the Finance Readiness Support to complement the advisory portfolio of the GET.invest Finance Catalyst. As such, the new service will target local, earlier stage micro-, small- and medium-sized energy companies and provide hands-on, in-depth business development advisory and coaching along the fundraising journey.
In the words of Michael Franz, Team Leader of GET.invest: “With this new service, GET.invest extends its support of mobilising renewable energy investments to an underserved clientele, who in turn often serves those in greatest need of access to energy. The GET.invest Finance Readiness Support has been built specifically for locally owned and managed businesses aiming for growth but in need of customised, professional advisory to get there. Our new service will support them in getting ready for investment and accessing finance, usually for the first time. Our vision with this is to make a real difference towards reaching SDG7 with diverse and vibrant energy markets.”
The GET.invest Finance Readiness Support will be implemented by eight advisory firms: Catalyst OffGrid Advisors, Energy 4 Impact, GFA Consulting Group, GreenMax Capital Advisors, Inensus, KPMG, Open Capital and Persistent. In its initial pilot phase, the service will draw on the firms’ networks to support innovative, impactful and scalable companies and projects, based on eligibility criteria developed in collaboration with industry associations.
GET.invest will shape the Finance Readiness Support throughout the pilot phase by working closely with several core partners, including the Alliance for Rural Electrification (ARE), GOGLA, the Global Distributors Collective (GDC), the Clean Cooking Alliance (CCA) and ENERGIA (Hosted by HIVOS). Additionally, GET.invest is collaborating with national renewable energy associations including the Associação Moçambicana de Energias Renováveis (AMER), Energy Private Developers (EPD), the Renewable Energy Association of Nigeria (REAN) and the Uganda National Renewable Energy and Energy Efficiency Alliance (UNREEEA). More partners are expected to be mobilised. Via this coalition, lessons learned and knowledge generated will also be shared with the energy access community at large. “We are glad to see this facility materialise, especially in the aftermath of Covid-19 and its impact on earlier-stage locally-owned enterprises. This service will be crucial to reach our goal of ‘energy access for all’. GET.invest is uniquely positioned to drive this forward given its wide network and partnerships with the industry associations at global and national levels, which can make this approach more holistic and inclusive,” said Sarah Bieber, Associate Director for Strategic Partnerships at Acumen on the occasion of the launch.
Ruchi Soni, Programme Manager, Results-Based Financing at SEforALL, added: “A just and equitable energy transition can only happen with increased investment in local energy access enterprises, including those serving the last mile. The GET.invest Finance Readiness Support will be key in mobilising much needed capital for these companies.”
About GET.invest: GET.invest is a European programme which supports investments in decentralised renewable energy. The programme targets private sector business and project developers, financiers and regulators to build sustainable energy markets in developing countries. Services include market information, a funding database, matchmaking events and access-to-finance advisory. The programme is supported by the European Union, Germany, Sweden, the Netherlands, and Austria, and works closely with initiatives and business associations in the energy sector.