Projects

Short Description:

Overall goal

The Energy and Environment Partnership Trust Fund is a multi-donor clean energy financing facility targeting 15 countries in Southern and Eastern Africa.

The Fund’s immediate objective and unifying theme is to establish enhanced access to clean energy in the SEA region, with particular focus on supporting poor and underserved groups, through direct financing, investment facilitation, business development support, knowledge, and policy engagement.

The overall objective of the fund is to be a driver of sustainable and inclusive green growth and climate change mitigation by supporting countries across the SEA region toward the realisation of a climate resilient, zero-carbon future and contributing to the Sustainable Development Agenda and the targets of the Paris Climate Agreement.

Expected results

The results of the fund are based on an assumption of at least EUR 55 Mio. in committed capital until 2025:

- EUR 21 Mio. per year in estimated energy related expenditure savings;

- 1.7 Mio. people living in a household with an improved energy source (improved indoor air quality; savings on energy spending; increased hours of available lighting; cost per household for improved energy access);

- 9.700 jobs created of which at least one third are for women;

- 970.000 tons CO2eq emissions reduced or avoided by EEP supported projects

Target group / Beneficiaries

The direct beneficiaries of the fund will be an estimated 50 - 60 project developers, receiving direct clean energy financing, investment facilitation and business development support. Additional direct beneficiaries will include the national policymakers of the 15 target countries and the regional energy sector agencies of the Southern African Development Community and the East African Community.

Activities

The fund will focus its operations on three linked and interrelated activities:

- Clean energy financing supporting early-stage energy access projects;

- Investment facilitation and Business Development Support (BDS), and

- Knowledge, policy and partnerships,

all with particular focus on supporting job growth and gender equality as well as underserved and vulnerable groups.

The fund will concentrate on 15 countries in Southern and Easter Africa, Botswana, Burundi, Kenya, Lesotho, Namibia, Malawi, Mozambique, Rwanda, Seychelles, South Africa, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe, where EEP-SEA has strong market recognition and demonstrated impact with flexibility to expand geographic focus pending interest and funding.

The fund will establish two primary windows for direct clean energy financing both aimed at leveraging additional investment:

- the EEP Innovation Window will target early-stage energy access projects in active development through an open challenge fund and call-for-proposal format closely following the model established under the EEP-SEA Programme and allocating financing in the form of general and repayable grants to successful project developers;

- the EEP Catalyst Window will provide a follow-on investment window for continued financing in the form of loans, guarantees and other risk-sharing instruments for selected projects stemming from the EEP innovation window. Direct financing under the catalyst window will be limited in scope, selecting strong cases with a proven track record that are poised for scaling up and able to demonstrate clear additionality for fund resources.

The fund will complement direct clean energy financing with targeted Investment Facilitation and Business Development Support providing technical advisory and investor outreach, recognising that access to specialised business advisory expertise and, even more crucially, access to finance beyond EEP remain critical constraints to growth for emerging businesses.

Under its third activity area, Knowledge, Policy and Partnerships, the fund will leverage robust data gathering and portfolio monitoring and evaluation to inform via active engagement with national governments, regional institutions, donors and funders, civil society and the private sector on broader policy and development issues.

Context

Energy access is widely acknowledged as a driver for economic growth and job creation as well as advances in gender equality, health, and education. Technological developments, falling costs and improvements in efficiency are making clean energy increasingly mainstream, and the opportunity to achieve zero carbon is within reach.

The Energy and Environment Partnership Trust Fund (EEP Trust Fund) is hosted and managed by the Nordic Development Fund (NDF) with implementation and coordination support provided by a competitively recruited service provider team operating from regional hub in Nairobi.

Confirmed financing for the fund currently consists of EUR 3 Mio. from the Austrian Development Cooperation (ADC), EUR 20,9 Mio. from Finland, EUR 8,6 Mio. from Switzerland, EUR 1,44 Mio. from Iceland and 22 Mio. from the NDF.

NDF is the joint Nordic climate and development finance institution of the five Nordic countries: Denmark, Finland, Iceland, Norway and Sweden, and will have overall responsibility for management, administration and performance of the fund throughout its life. NDF was established in 1989 and currently manages more than EUR 800 Mio. in paid-in capital from its member governments with the objective of facilitating climate change investments primarily in low-income countries in Asia, Africa and Latin America.

Since 2010, EEP projects have improved energy access for more than 5.2 Mio. people, and contributed to more than 10.800 new jobs, of which more than 5.000 were taken up by women. EEP financing has also triggered direct greenhouse gas (GHG) emission reductions of more than 1.6 Mio. tons of CO2e and leveraged more than EUR 180 Mio. in additional investment.

The fund will ensure that this proven and effective EEP-SEA model for identifying and fast-tracking support to high-impact and innovative renewable energy and energy efficiency projects endures and stays relevant in a rapidly changing, energy financing landscape.