EIB Commits $40 Million to Acre Impact Capital’s Innovative Private Debt Fund to Boost Climate Infrastructure Investment in Africa

EIB commits up to $40 million to Acre Impact Capital’s Export Finance Fund I; first fund investing in commercial debt of export credit agencies transaction to catalyse climate-infrastructure in Africa; fund to support renewable power, health, food and water scarcity; sustainable cities; and green transport; innovative strategy offers commercial institutional and impact investor exposure to climate infrastructure in Africa and mitigates market risk.
addressing the imperative need for investment in climate infrastructure

Official export credit agencies (“ECAs”) provide export finance with long-term debt financing. Export finance enables project sponsors to considerably reduce the cost of debt by obtaining both very attractive financing on ECA-backed financing and long-term financing for up to 22 years. In doing so, ECAs can considerably increase the affordability of a project for the project sponsor and attract private capital.

The new fund invests in commercial debt tranches with shorter maturities, where typically 15% or more of the project’s value must be in place before ECAs can support the remaining 85%. Despite the fact that commercial banks typically finance the tranche guaranteed by an ECA, the availability of financing for the commercial debt tranche has become increasingly limited since the COVID-19 pandemic. By providing specialised funding for this tranche, the Fund will enable transactions and may be able to mobilise $5.60 of private sector capital for every dollar invested.

Thomas Ostros, vice president of the European Investment Bank, stated, “The European Investment Bank collaborates with leading financial partners to expedite the development of climate infrastructure throughout Africa and the world.” The EIB is pleased to partner with Acre Impact Capital and support this unique and innovative fund that seeks to fill a critical market gap, mobilise institutional capital for sustainable and impact-driven African infrastructure, and promote gender equality.

“We are thrilled to enter a long-term partnership with the European Investment Bank to advance Acre Impact Capital’s mission to provide access to essential services to underserved communities and contribute to reducing Africa’s estimated $100 billion annual infrastructure financing gap.” Hussein Sefian, CEO of Acre Impact Capital, stated. “The current credit environment creates attractive opportunities for discerning investors, while also addressing the urgent need for funding essential infrastructure projects.”

Through the establishment of regional offices, Acre Impact Capital will progressively expand its local presence.

Dedication to the 2X Challenge (http://www.2XChallenge.org)

The fund is committed to gender-sensitive investing and seeks to ensure that at least 30 percent of its portfolio of projects satisfy the 2X Criteria (https://www.2xGlobal.org/), thereby increasing the proportion of women in its investment portfolio. In addition, Acre Impact Capital pledges to promote and sustain gender parity among fund managers and to foster an inclusive culture that values diversity.

Acre Impact Capital has received Technical Assistance from the United States Agency for International Development’s (https://www.USAID.gov) Scaling-Up Renewable Energy (SURE) (https://apo-opa.info/3DCftzL) programme to support the incorporation of the 2X Criteria into its investment processes.