IFC Announces Support to Acumen’s Hardest to Reach Initiative to Boost Access to Clean and Affordable Energy in Africa

November 14, 2024, Baku, Azerbaijan - During the 29^th U.N. Climate Change Conference of the Parties (COP29) in Baku, Azerbaijan, IFC, a member of the World Bank Group, today announced that its Board of Directors has approved today an investment in Acumen's Hardest to Reach (H2R) initiative to activate markets for clean and affordable energy in Sub-Saharan Africa. This is the first blended finance initiative dedicated to financing household solar systems for the hardest-to-reach populations in Africa.

"IFC's investment in Acumen's H2R initiative underscores our commitment to addressing the critical energy access gap in Sub-Saharan Africa, where nearly 600 million people lack basic electricity" says Makhtar Diop, Managing Director, IFC. "Initiatives like this one can help to catalyze off-grid solar markets in African countries, encouraging more international companies to expand into them, and supporting local companies to sustainably and efficiently scale up their operations."

The Acumen H2R initiative will support off-grid solar companies through flexible, impact-linked debt and patient capital investment. According to the World Bank and GOGLA's 2024 Off-Grid Solar Market Trends Report, off-grid solar solutions are the most cost-effective and rapid means to provide basic electricity for more than 40% of those who remain globally unelectrified by 2030. Distributed energy solutions have already provided 55% of new connections in sub-Saharan Africa between 2020 and 2022, where 80% of the world's unelectrified live, unlocking economic potential and improving quality of life.

"Acumen's Hardest-to-Reach initiative is a vital step toward solving energy poverty for communities often overlooked in the climate transition. For too long, we've under-invested in these areas and underestimated their potential. Hardest-to-Reach opens the door to a real pathway out of energy poverty," said Jacqueline Novogratz, Acumen's Founder and CEO. "Since its launch, H2R has disbursed $10 million across six countries. With IFC's partnership, we can scale this impact and move closer to clean energy access for all."

Through this support from IFC, the H2R initiative will provide millions of people with access to household solar electricity, reducing kerosene and diesel use and GHG emissions. It will also be a key contribution to Mission 300, a joint initiative of the World Bank Group and the African Development Bank to connect 300 million people to electricity in Africa by 2030.

IFC plans to invest up to US$25 million from its own account in the Acumen H2R initiative. To help Acumen de-risk private capital investors in the project and lower the overall cost for the borrowers, IFC also intends to mobilize up to $20 million from the IDA Private Sector Window Blended Finance Facility (IDA PSW BFF).

Critical to achieving universal energy access (SDG7) and global emissions reduction goals, this initiative builds on nearly 20 years of Acumen's experience investing in enterprises and building markets that bring energy access to low-income, off-grid communities in Africa. To date, Acumen's energy portfolio includes over 40 companies, impacting more than 300 million lives and preventing over 50 million tons of greenhouse gas emissions.

About Acumen

Acumen is a global force of entrepreneurs, investors, philanthropists, and social innovators working together to build a world based on dignity. We were founded by Jacqueline Novogratz on the radical idea that business, when cultivated with moral imagination, can break the cycle of poverty. We invest in transformational companies, build sustainable markets, and prepare leaders with the tools they need to create a more just and inclusive future. Since 2001, we have scaled companies and shaped markets in some of the hardest-to-reach communities on the planet, impacting over half-a-billion lives

To learn more visit acumen.org.

About the IDA Private Sector Window

The International Development Association's Private Sector Window (IDA PSW) was launched in 2017 to catalyze private sector investment in the poorest and most fragile countries. Recognizing the key role of the private sector in creating jobs and promoting economic transformation, the window provides a source of co-investment funding and guarantees to de-risk private investments supported by the World Bank Group's International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA). The IDA PSW is an option when there is no commercial solution and the Bank Group's other tools are insufficient.

For more information, visit: http://ida.worldbank.org/psw