Shell Foundation and Dutch development bank FMO have announced a new growth fund for energy access businesses in India and Africa, with the aim of deploying $50 million and being operational in Q1 2018.
According to Pradeep Pursnani, Deputy Director Shell Foundation, the fund is designed to “provide entrepreneurs with the patient, flexible, risk tolerant, capital that the energy access market in emerging economies need.” He said the fund will target investments of $1-$5 million in mezzanine debt.
“This will be a great opportunity for social entrepreneurs in India and Africa who are working on energy access initiatives to access supportive bespoke capital,” Pursnani said.
Shell Foundation and FMO are are currently looking for other investors to join the fund.
There is no defined split between entrepreneurs in Africa and India. The Fund Manager and Investment Committee will assess opportunities and make their decisions based on the impact potential and investment gap in order to provide the best value outcome to entrepreneurs and investors.
FMO has been working together with Shell Foundation on projects for the last 10 year, unlocking over €70 million worth of funding into high-impact enterprises providing essential services in Africa and Asia.
Previous collaborations between Shell Foundation and FMO include the responsAbility Energy Access Fund, which since 2015 has backed two Indian access to energy businesses: an Oikocredit-owned finance business Maanaveeya and the Indian Rooftop Solar business Fourth Partner Energy.