New Partnership Facilitates Small Loans to Energy Access Enterprises
As a result of the increasing need to bridge the energy access financing gap, Energising Development (EnDev) introduces a new approach: the Energy Access SME Finance Facilitator. EnDev partners with specialist debt financier Charm Impact to mobilise working capital loans to early-stage energy access enterprises. Under this new partnership, Charm Impact will develop a portfolio of loans in six EnDev partner countries: Kenya, Liberia, Malawi, Rwanda, Tanzania, and Uganda.
To achieve Sustainable Development Goal 7 (SDG7, affordable and clean energy) by 2030, the international community urgently needs to accelerate funding for electricity and clean cooking. EnDev recognises that access to finance for small and medium-sized enterprises (SME) in the energy access sector is especially important in this process. The lack of adequate financing options hinders the growth trajectory of small and medium-sized enterprises. Especially SMEs with a limited track record and few assets are often excluded from financial support as lenders and investors view them as high-risk investments.
By strategically expanding its approach towards facilitating access to finance, EnDev aims to empower businesses in the field of for example clean cooking, solar home systems, productive use of energy (PUE), commercial and industrial (C&I), and e-mobility to stimulate growth, and catalyse market expansion in developing countries. With EnDev and Charm Impact’s joint intervention, locally owned and preferentially female-led SMEs now have the opportunity to demonstrate their viability and build a financial track record. This will make them more attractive to investors and traditional banking institutions.
Innovative approaches
Under the SME Finance Facilitator approach, EnDev is exploring innovative approaches aimed at mainstreaming financial support mechanisms needed for enterprise growth. This could involve intensifying cooperation with local financial institutions such as banks, savings and credit cooperative organisations, crowdfunding platforms and specialist financial intermediaries. EnDev provides training and advice to these financial partners, increasing the financing options for energy technology suppliers and users.
The approach builds forward on the successful implementation of the SME Finance Facilitator under the SEE-Clean Cooking programme, providing tailored, small loans for SMEs in the energy access sector. With EnDev and Charm Impact joining forces, the partnership is ready to drive growth in the clean energy sector. This strategic partnership aligns with the overarching objectives of SDG 7 and embodies a pragmatic approach to addressing pressing challenges in the sector.
Are you a small or medium-sizes energy access enterprise and interested in receiving funding under the Energy Access SME Finance Facilitator?
