Hardest to Reach (H2R) Market Expansion Fund (IFC-49603)

Regions
  • Africa
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • International Finance Corporation (IFC)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Proposed
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
B
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Nov 13, 2024
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
ACUMEN FUND, INC.
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Finance
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Equity
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 25.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Project Cost (USD)
$ 200.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Primary Source

Original disclosure @ IFC website

Updated in EWS Mar 14, 2025

Disclosed by Bank Oct 10, 2024

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

According to the Bank’s website, the proposed investment is for up to US$25 million from IFC’s own account in the senior tranche of the Acumen Hardest to Reach Fund (the H2R Fund, the Fund, or the Project). The project targets a US$200 million strategy, structured into three US$60 million equity tranches—junior, mezzanine, and senior—alongside a US$20 million grant facility dedicated to impact-based interest rate reductions for borrowers, linked to KPIs such as the number of first-time electricity users reached.The Fund aims to support off-grid solar (OGS) companies in 16 countries in Sub-Saharan Africa (SSA) with the lowest electrification rates and the highest poverty levels by providing financing to a mix of international and local companies that distribute and finance off-grid solar home systems, in particular those following the Pay-as-you-Go (PayGo) business model.

Early Warning System Project Analysis
For a project with severe or irreversible impacts to local community and natural resources, the Early Warning System Team may conduct a thorough analysis regarding its potential impacts to human and environmental rights.

The Project entails an investment of up to US$45 million in the Fund to support off-grid solar companies in 16 countries in Sub-Saharan Africa with the lowest electrification rates and highest poverty levels. primarily focuses on vertically integrated solar home system (SHS) companies, last mile distributors of SHS companies, and accounts receivables financing vehicles, while micro-grids and mini-grids are expected to receive a smaller share of the fund’s financing. The expected E&S risks and impacts of the Project are considered medium. As such, the Project has been categorized as Category FI-2 in accordance with IFC's Sustainability Policy. The Project will not support coal-related activities or higher-risk business activities that may include a) involuntary resettlement, b) risk of adverse impacts on Indigenous Peoples, c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage or d) significant Occupational Health and Safety risks.

The key E&S risks and impacts derive from the Fund Manager's capacity to identify and manage the potential E&S risks associated with its financing activities. Typical risks and impacts include occupational health & safety, supply chain-related risks, labor and working conditions, and waste management, among others. The Fund Manager’s human resources policies are generally aligned with IFC Performance Standard 2: Labor and Working Conditions. The human resources policies will be formalized for operations in Kenya, Nigeria, and the United Kingdom.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

The proposed investment is (i) up to US$25 million from IFC’s own account in the senior tranche and (ii) up to US$20 million from Blended Finance (likely IDA-PSW) in the mezzanine tranche.

he H2R Fund targets a US$200 million strategy, structured into three US$60 million equity tranches—junior, mezzanine, and senior—alongside a US$20 million grant facility dedicated to impact-based interest rate reductions for borrowers, linked to KPIs such as the number of first-time electricity users reached.

Financial Intermediary
A financial intermediary is a bank or financial institution that receives funds from a development bank. A financial intermediary then lends these funds to their clients (private actors) in the form of loans, bonds, guarantees and equity shares. Financial intermediaries include insurance, pension and equity funds. The direct financial relationship is between the development bank and the financial intermediary.
Private Actors Description
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

Acumen Fund Inc. is a nonprofit impact investment fund headquartered in the U.S. that invests in social enterprises serving low-income individuals in developing and underserved markets. Since its founding in 2001, Acumen has invested in companies that bring innovations to people in poverty such as off-grid energy, resilient agriculture, and dignified work. Acumen has been a leader for the off-grid solar sector, serving as a board member for the industry association GOGLA; convening working groups like the REACH initiative to promote industry engagement in difficult markets; and driving the organization of the Energy Access Relief Fund in response to COVID; and serving as an investor and incubator.


Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

Acumen Fund Inc
Jiwoo Choi
Chief of Strategic Initiatives
+1 212-566-8821
jchoi@acumen.org
40 Worth Street, Suite 303 New York, NY, 10013, USA
https://acumen.org/

ACCESS TO INFORMATION

You can submit a request for information disclosure at: https://disclosures.ifc.org/#/inquiries

If you believe that your request for information from IFC has been unreasonably denied, or that this Policy has been interpreted incorrectly, you can submit a complaint at the link above to IFC's Access to Information Policy Advisor, who reports directly to IFC's Executive Vice President.

ACCOUNTABILITY MECHANISM OF IFC/MIGA

The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org

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