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Africa Energy Guarantee Fund (AEGF)

African Continent
Grant Amount
EUR 1,000,000
Total project cost
EUR 1,304,100,000
Under disbursement
PFG Lead Financier

The objective of the Africa Energy Guarantee Facility (AEGF) is to provide risk mitigation and credit enhancement solutions to facilitate and increase private sector involvement in the African energy sector. Despite a large energy infrastructure gap and a growing demand for energy in many countries, private sector investment and involvement in the African energy sector remains modest. Issues such as regulatory uncertainties, weak off-takers and more generally weak business environments dissuade the private sector and increase the level of transaction costs.
The project aims at providing solutions contributing to SE4All objectives by increasing access to modern energy services, increasing available private financing for energy efficiency measures and increasing available private financing for renewable energy in Africa.
Project feasibility and due diligence is now complete.  The project is now in its approval and negotiation phase, with detailed discussions now taking place on implementation issues.

The ITF grant has so far been used to finance the market study (including market potential; existing alternative/competing products; investment strategy and fund positioning).  

The grant is now being used for the implementation of the AEGF - where it is supporting:

- Negotiation with investors- Drafting of legal documentation, operational policies and guidelines

Any remaining funding will be used for:

- Financing of part of operational costs during AEGF’s start-up and ramp-up period- Establishment of the Facility agent's infrastructure and systems - Operational start up (e.g. marketing, origination)- Evaluation of the initial launching phase and proposals for amendments of its modus operandi.