The LEAF Risk Sharing Facility (LEAF RSF) is a USD 100m counter-guarantee facility to the African Guarantee Fund (AGF) aimed at supporting access to finance for Small and Medium Enterprises (SMEs) in the decentralized renewable energy space (DRE) that offer solar home systems (SHS), green mini-grids (GMG) and captive commercial/industrial solutions (C&I). The proposal is for the Bank to contribute with USD 52m Partial Credit Guarantee (PCG) to the facility while the Green Climate Fund (GCF) –in context of the Leveraging Energy Access Finance Framework (LEAF) –contributes with USD 48 million PCG. The facility is expected to catalyze a minimum of USD 267 million in local currency financing from AGF’s Partner Financial Institutions (“PFIs”) for DRE projects and companies over a 5-year investment period. The LEAF RSF is similar to the Bank’s Affirmative Action for Women in Africa (AFAWA) Risk Sharing Mechanism (AFAWA RSM) Initiative, in collaboration with AGF wherein the Bank and other donors provide counter-guarantees for PFIs’ portfolios of loans to women-led or women-owned businesses. This project primarily contributes to climate mitigation results. As such, 100% of the total approved amount is attributed as climate finance, of which 100% is dedicated to mitigation.

The Facility improves the credit profile of DRE loan portfolios through the provision of guarantees it mobilizes and increases local currency and commercial financing for renewable energy at scale. LEAF RSF complements the Bank's broader efforts to increase energy access and support the clean energy transition of African countries, specifically addressing constraints in access to finance.

LEAF is an AfDB programme in collaboration with the GCF that extends concessional credit enhancement and debt instruments to Decentralized and Distributed Renewable Energy (DRE) companies. The LEAF Programme supports the development of DRE in six countries Nigeria, Kenya, Ghana, Tunisia, Guinea and Ethiopia. LEAF RSF expects to facilitate funding for 160 companies in LEAF countries, out of which circa 30% will be women-led as defined by 2X challenge, resulting in 112MW of installed solar generation capacity, approximately 234,162de tCO2eq of GHG emission reductions and the creation of 1,957 direct full-time jobs in these countries. The technical assistance component will increase the capacity of around 15 financial institutions to participate in transactions in LEAF countries, paving the way for deeper engagement in the sector.

Environmental Category: [2] Moderate Risk

A USD 100m counter-guarantee facility to the African Guarantee Fund (AGF).

The proposal is for the Bank to contribute with USD 52m Partial Credit Guarantee (PCG) to the facility while the Green Climate Fund (GCF) –in context of the Leveraging Energy Access Finance Framework (LEAF) –contributes with USD 48 million PCG. The facility is expected to catalyze a minimum of USD 267 million in local currency financing from AGF’s Partner Financial Institutions (“PFIs”) for DRE projects and companies over a 5-year investment period.

The African Guarantee Fund is a non-bank financial institution that helps small and medium-sized businesses in Africa get loans by sharing the financial risk with local banks. It was set up in 2011 by the African Development Bank along with other international governments.

Name: Elsbeth Aliene KONING
Email: e.koning@afdb.org

ACCESS TO INFORMATION

You can submit an information request for project information at: https://www.afdb.org/en/disclosure-and-access-to-information/request-for-documents. Under the AfDBs Disclosure and Access to Information policy, if you feel the Bank has omitted to publish information or your request for information is unreasonably denied, you can file an appeal at https://www.afdb.org/en/disclosure-and-access-to-information/appeals-process.

ACCOUNTABILITY MECHANISM OF AfDB

The Independent Review Mechanism (IRM), which is administered by the Compliance Review and Mediation Unit (CRMU), is the independent complaint mechanism and fact-finding body for people who have been or are likely to be adversely affected by an African Development Bank (AfDB)-financed project. If you submit a complaint to the IRM, it may assist you by either seeking to address your problems by facilitating a dispute resolution dialogue between you and those implementing the project and/or investigating whether the AfDB complied with its policies to prevent environmental and social harms. You can submit a complaint electronically by emailing crmuinfo@afdb.org, b.kargougou@afdb.org, b.fall@afdb.org, and/or s.toure@afdb.org. You can learn more about the IRM and how to file a complaint at: https://www.afdb.org/en/independent-review-mechanism/