Latest news with #EthiopisTafara
Time of India
15-05-2025
- Business
- Time of India
IFC invests $5 million in Husk Nigeria to build 108 solar mini grids
New Delhi: The International Finance Corporation (IFC), a member of the World Bank Group, has announced a $5 million investment in Husk Power Energy Systems Nigeria Limited (Husk Nigeria) to support the deployment of up to 108 solar hybrid mini grids across Northern Nigeria, aiming to deliver renewable electricity to approximately 115,000 people and businesses. The funding is the first investment under IFC's Distributed Access through Renewable Energy Scale-up (DARES) Platform, a $200 million debt facility approved in November 2024 to accelerate private sector-driven decentralized renewable energy (DRE) solutions in West and Central Africa. The total project cost is estimated at $25 million. IFC's $5 million financing package includes a $2.5 million senior loan from its own account and a $2.5 million concessional subordinated loan from the Canada-IFC Renewable Energy Program for Africa. The revolving loan structure allows Husk to repay and redraw funds during the project's execution. The DARES Platform complements the $750 million World Bank-financed Nigeria DARES Project launched in December 2023 and implemented by Nigeria's Rural Electrification Agency. The overall effort is aimed at providing more than 17.5 million Nigerians with new or improved electricity access through decentralized systems. 'The DARES Platform is an innovative approach to tackling one of Africa's most pressing challenges—energy access. By partnering with Husk, a leading renewable energy developer globally, through the first project under the DARES Platform, we are not only addressing the immediate electricity needs of underserved communities in Nigeria but also laying the foundation for a scalable model that can be replicated across the continent. This initiative underscores IFC's commitment to advancing sustainable energy solutions through strong partnerships between the private sector, governments, and development institutions," said Ethiopis Tafara, Regional Vice President of Africa, IFC. "This innovative debt facility is exactly what the minigrid industry needs to scale - blended, long-term and affordable capital," said Husk Co-Founder and CEO Manoj Sinha. 'Access to working capital is critical for sustained and rapid growth. Adding 108 new communities to our minigrid portfolio with IFC support is an important step toward our goal of deploying at least 250MW of decentralized renewable energy projects in Nigeria ,' said Olu Aruike, Manager, Husk Nigeria. Husk's solar hybrid mini grids provide an alternative to diesel generators, offering users cost savings of at least 25% while reducing greenhouse gas emissions. The 108 sites are expected to create 28,750 new electricity connections. Despite being Africa's largest economy, Nigeria has over 85 million people without access to electricity, the highest electricity access deficit in the world. Even grid-connected users face unreliable power supply, driving widespread diesel generator usage. The DARES Platform also supports the World Bank Group and African Development Bank's Mission 300, launched in April 2024, which targets electricity access for 300 million people in Africa by 2030. It also promotes gender inclusion, with a focus on female-headed households, women-led MSMEs, and employment for women in the energy sector.
Yahoo
15-05-2025
- Business
- Yahoo
Africa looks to unleash local capital as US drives global uncertainty
African policymakers and bankers are exploring ways to unlock trillions of dollars tied up in the continent's institutional funds to build infrastructure amid growing uncertainty around international investment caused by erratic US trade policies. 'There is about $4 trillion in Africa, mostly in banks, pension funds and foreign reserves,' Samaila Zubairu, CEO of the Africa Finance Corporation, a Lagos-based multilateral lender, told Semafor during this week's Africa CEO Forum in Abidjan, citing research by his institution. 'The issue is, how we get it to flow into projects.' The topic was a recurring talking point for business leaders during this week's conference, with the need to deploy local capital becoming more acute after the White House dismantled its main foreign aid body USAID, piling new pressure on African government finances. Ethiopis Tafara, vice president of the International Finance Corporation, the World Bank's private investment arm, told delegates there was a need to mobilize private capital to plug gaps left by the withdrawal of aid. Governments and the private sector need to engage in more dialogue, he said, to help administrations shore up the 'bankability' of projects that could not be funded with public money. Zubairu said AFC, which specializes in infrastructure development, is in talks with authorities in Angola, Botswana, and Kenya to replicate InfraCredit, a Nigerian credit institution that supports pension fund investments in infrastructure projects, with the west African country's sovereign wealth fund providing guarantees on local currency debt. AFC is an equity investor, along with the Nigerian Sovereign Investment Authority, which strengthens InfraCredit's capital base. African investors have long wanted to unlock private capital from existing institutional funds. The thinking is that if more domestically held capital supports major projects then the continent could draw larger pools of international funds at more favorable interest rates. In areas such as infrastructure, for example, Africa is estimated to have a $100 billion a year funding gap. One way to bridge that shortfall, analysts say, would be to unlock a larger portion of African funds, which have been concentrated in more conservative assets such as fixed income and treasury bills. 'Raising financing domestically for our critical infrastructure projects is a huge priority for our continent,' said Acha Leke, chairman of McKinsey's Africa group. 'We've estimated that if African pension funds doubled their current allocation to back such projects to 4%, this could unlock more than $20 billion of additional financing per year.' One institution that has had some success in changing that mix has been Africa50, a development finance platform that seeks to help tackle infrastructure gaps. Last year Africa50's Infrastructure Acceleration Fund announced it had raised $225 million, predominantly from African development banks and funds, and hopes to hit a $500 million target this year. Joseph Atta-Mensah, a senior fellow at the African Centre for Economic Transformation think tank in Accra has argued that Africa's relationship with the World Bank and International Monetary Fund must change in order to drive economic development. 'Africa needs to make the international financial infrastructure work in its favour,' he wrote in a London School of Economics blog. The continent 'needs a new global financial architecture — one that reduces dependence on expensive commercial debt and expands access to concessional finance,' Atta-Mensah wrote. 'Innovative instruments like debt-for-climate or debt-for-investment swaps can tie sustainability to solvency.' While private capital from angel investors has played a vital role in helping to build the foundation of Africa's startup investment space, it has been heavily reliant on international funds once the startups need venture capital. There's been a push to further professionalize and expand the impact of local angel investors, according to Fadilah Tchoumba, president of Africa Business Angels Network. 'We're really focusing on accelerating local capital participation by refining our key investment vehicles to give more potential investors confidence,' said Tchoumba. 'We've also doubled down on recruiting even more African angel investors to expand our local capital base while also building partnerships with domestic and international financial institutions to increase their impact.' Pension funds can be a catalyst for solving Africa's financing crisis, according to the Africa Private Capital Association. But encouraging capital allocators to deploy capital in Africa is a challenge. Sign in to access your portfolio
