New Bridging Fund from responsAbility Aims to Close Energy Access Gap

 

  • Swiss impact asset manager responsAbility Investments has announced the launch of a US 3 million Technical Assistance Facility linked to a responsAbility-managed climate finance fund.
  • The new fund targets the financing gap in the effort to provide universal access to clean power in developing countries.
  • Initial funding to the Facility is provided by Good Energies Foundation and the Swiss State Secretariat for Economic Affairs (SECO).

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.

Given the nascent nature of the Fund’s investment universe, responsAbility has launched a donor-funded Technical Assistance Facility to support market building. A variety of projects will help portfolio companies to enhance their operations by following best international practices, for instance in managing ESG risks. Over the five years of its existence, the Facility expects its projects to reach 66% of the Fund’s portfolio companies while also addressing companies in the investment pipeline at large.

The newly launched Technical Assistance Facility targets USD 3 m in donor contributions. Initial funding is provided by Good Energies Foundation and the Swiss State Secretariat for Economic Affairs (SECO).

Eva Tschannen, Head of responsAbility’s Technical Assistance Management, explained: “To bridge the financing gap towards universal access to clean energy in underserved markets, both funding and know-how building will be required. 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 of Good Energies Foundation and SECO for a new Technical Assistance Facility which will help us to further develop this high-impact investment universe.”

Massimo Bloch, Program Manager, Private Sector Development at SECO, said: “SECO’s contribution to this climate-focused Technical Assistance Facility will facilitate private investments in climate-friendly companies. Co-financed Technical Assistance will strengthen the operational capacity of invested or potential portfolio companies, improving investment opportunities and building up the market. With this project SECO continues its engagement in scaling-up the renewable energy sector in emerging markets, contributing to a lower carbon economy.”

Speaking on behalf of Good Energies Foundation, Programme Manager for the Energy Programme Stephanie Jones said: “We look for ways that our grant funds can influence larger flows of capital such as commercial investment, to increase social impact, for example in this case building the distributed renewable sector as a whole. This is our first time supporting Technical Assistance directly associated with a fund, and there is strong evidence that this approach has the greatest impact in strengthening companies, leading to both growth and follow-on investment.”

Author: Bryan Groenendaal

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