The African Guarantee Fund (AGF) (www.AfricanGuaranteeFund.com) today announced the launch of its Mission 300 Local Currency Guarantee Facility, a groundbreaking initiative to mobilize $5 billion to support energy access projects across Africa. This facility targets financing for small and medium-sized enterprises (SMEs) in the Distributed Renewable Energy (DRE) sector.
The facility forms a critical component of an ambitious initiative led by the African Development Bank Group and the World Bank Group, to provide electricity to 300 million Africans by 2030.
Africa faces a significant energy access challenge, with approximately 600 million people lacking electricity as of 2023. The continent is estimated to require an annual investment of nearly $25 billion to achieve universal energy access by 2030.
“The Mission 300 Local Currency Guarantee Facility will encourage collaboration with African governments whilst leveraging concessional financing from the African Development Bank, the World Bank Group, and other development partners to scale the involvement of local banks in financing Distributed Renewable Energy solutions,” said Wale Shonibare, Director for Energy Financial Solutions, Policy and Regulations at the African Development Bank. He is also a non-Executive Director with the Africa Guarantee Fund.
The fund has been at the forefront of bridging the financing gap facing green SMEs by steering the implementation of the Green Guarantee Facility, supported by the Nordic Development Fund and the Investment Fund for Developing Countries.
The Green Guarantee Facility has mobilized financing for green, clean, and renewable energy projects while positioning AGF as a leader in driving sustainable development in Africa. The Green Guarantee Facility mitigates risks within loan portfolios, lowering the exposure of financial institutions to defaults and enhancing their confidence in lending to distributed renewable energy SMEs. It has also accelerated electrification efforts, particularly in underserved rural and peri-urban communities.
By addressing systemic barriers such as high collateral requirements, currency mismatches, and the lack of long-term financing, AGF has been able to de-risk SME lending and mobilize significant private sector capital into Africa’s energy transition.
With its proven track record in catalyzing SME financing while leveraging innovative guarantee solutions and capacity-building programs, the AGF is best positioned to advance Africa’s energy transformation.
“AGF’s leadership in driving financial innovation for SMEs aligns seamlessly with the goals of Mission 300. By addressing financing gaps and fostering public-private partnerships, AGF plays a crucial role in driving inclusive energy solutions, accelerating the energy transition, and reducing carbon emissions across the continent,” said Jules Ngankam, AGF Group CEO. “We have successfully implemented the Green Guarantee, which has facilitated progress toward national commitments under the Africa Energy Declaration, the African Union’s Vision 2063, and the global Sustainable Development Goals, fostering inclusive growth and climate resilience.”
A recent example of AGF’s impact in the energy sector is its participation in a credit guarantee syndication for a 40 MW solar plant in Madagascar. This landmark transaction demonstrated the viability of local currency financing for renewable energy projects in the country while enhancing power sector resilience through diversification away from thermal power. The project, which provides improved electricity access to approximately 285,000 people, supports both UN Sustainable Development Goal 7 (affordable and clean energy) and Goal 13 (climate action) by reducing emissions by 34,000 tonnes of CO2 through the displacement of thermal power.
Distributed by APO Group on behalf of African Guarantee Fund.
Contact:
African Guarantee Fund
Africa House, Muthangari Road
T: +254 732 148 000
P.O. Box 57795-00200 Nairobi, Kenya
www.AfricanGuaranteeFund.com
About Mission 300:
Mission 300 is a transformative initiative launched jointly by the African Development Bank and the World Bank Group to accelerate access to clean and sustainable energy for 300 million Africans by 2030. Mission 300 addresses Africa’s significant energy access gap, where nearly 600 million people remain without electricity. Through strategic partnerships, innovative financing mechanisms, and capacity-building efforts, Mission 300 is unlocking private-sector investment to drive the development of distributed renewable energy (DRE) solutions.
By leveraging de-risking tools and aligning with global sustainable development goals, Mission 300 is committed to fostering inclusive growth, enhancing energy security, and building climate resilience across the African continent.
About African Guarantee Fund:
African Guarantee Fund, rated AA- by Fitch Ratings, is a specialized guarantee provider whose mission is to facilitate economic development and poverty reduction in Africa. To achieve this, AGF increases access to finance for Small and Medium-sized Enterprises (SMEs) across key economic sectors through an array of guarantee products and capacity development assistance. Since its inception, AGF has unlocked more than $5 billion in SME financing through partnerships with 250 partner financial institutions across 44 African countries.
AGF is backed by the following shareholders and sponsors: The Government of Denmark through the Danish International Development Agency, the Government of Spain through the Spanish Agency for International Cooperation, the African Development Bank, French Development Agency, Nordic Development Fund, Investment Fund for Developing Countries (IFU), German Development Bank, French Agency for Private Sector (PROPARCO), West African Development Bank, Global Affairs Canada, USAID’s West Africa Trade and Investment Hub, TechnoServe, NORAD and Mastercard Foundation.
