(Ecofin Agency) - The Energy Access Relief Fund, recently established by a consortium of investors and development financing institutions, has raised a total of $68 million for its first closing. The vehicle, managed by Social Investment Managers and Advisors (SIMA), will provide short-term loans to nearly 90 companies active in the energy sector in sub-Saharan Africa and Asia. EARF targets companies that are still struggling to get financing due to the economic crisis linked to Covid-19.
Ultimately, the Fund plans to invest $80 million to facilitate access to energy for at least 20 million people in the targeted areas. “Together, CDC, DFC, and FMO are mobilizing our capital to ensure the survival of small and medium social enterprises extending energy access to the 800 million people living without power. The EARF’s flexible and innovative financial structure blends different types of capital to offer low-interest loans and liquidity while the health and economic consequences of the pandemic continue,” said Geoff Manley, CDC Group’s head of energy access and efficiency.
SIMA’s analysis of energy companies eligible for short-term financing in 50 countries found that 77% of potential borrowers need emergency financial assistance to stay afloat and avoid taking drastic measures such as suspending operations.