The US’ International Development Finance Corp. (DFC) and Shell Foundation are teaming up to work on renewable energy access in low-income states, in Africa and Asia.
The two aim to bring renewable energy to more than 5 million people by 2025. They are targeting people without grid access who are living on $2-10 per day. The memorandum of understanding (MoU) also aims to empower women economically.
Shell Foundation will use more than $45mn in grant funding to build a number of businesses. These will provide distributed renewable energy.
DFC said it hoped to approve up to $100mn in early stage debt and equity to support these businesses. The agency said it would work with Shell Foundation on its energy investments made alongside the UK’s Foreign, Commonwealth and Development Office (FCDO), Power Africa and USAID.
The agency noted the MoU with Shell Foundation was in line with another MoU. DFC signed an agreement in December 2020 with the Rockefeller Foundation.
“This new collaboration leverages DFC’s effective financing tools and Shell Foundation’s experience and portfolio to support companies that connect people living at the last mile to productive electricity, which will dramatically improve their lives,” said Acting DFC CEO Dev Jagadesan.
He went on to say that commercial financing with Shell Foundation would help companies scale, “while prioritising women’s economic empowerment and supporting economic growth as countries continue to respond to the COVID-19 pandemic”.
Shell Foundation’s CEO Sam Parker said distributed renewable energy was “already providing more affordable, more reliable energy to tens of millions of people who cannot access the grid, mostly in ways that are far more cost-effective and quicker to deploy, yet they are unable to access significant growth investment”.
DFC set out its Roadmap for Impact in 2020. This aims to secure energy access for at least 10 million people by 2025.
Under the MoU DFC signed with the Rockefeller Foundation, the US agency said it would provide up to $2bn for distributed renewable energy. The Rockefeller Foundation would provide $50mn to de-risk the DFC investments.