IFC Backs Acumen Initiative to Expand Clean Energy Access in Africa

The International Finance Corporation (IFC) has announced a significant investment to support Acumen’s Hardest-to-Reach (H2R) initiative, aimed at increasing access to clean and affordable energy in Sub-Saharan Africa. The commitment, unveiled during COP29 in Baku, Azerbaijan, represents the first blended finance initiative dedicated to funding household solar systems for underserved populations in the region, where nearly 600 million people remain without electricity.

Makhtar Diop, Managing Director of IFC, underscored the urgency of addressing the region’s energy challenges. “IFC’s investment in Acumen’s H2R initiative underscores our commitment to addressing the critical energy access gap in Sub-Saharan Africa,” he said. “Initiatives like this one can help 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 H2R initiative offers flexible, impact-linked debt and patient capital investments to off-grid solar companies. This approach aligns with findings from the World Bank and GOGLA’s 2024 Off-Grid Solar Market Trends Report, which highlights off-grid solar solutions as the most cost-effective and rapid means to provide electricity to the estimated 40% of unelectrified people globally by 2030. Distributed energy systems have already driven 55% of new connections in Sub-Saharan Africa between 2020 and 2022, according to the report.

Acumen Founder and CEO Jacqueline Novogratz emphasized the transformative potential of the initiative. “Acumen’s Hardest-to-Reach initiative is a vital step toward solving energy poverty for communities often overlooked in the climate transition,” she said. “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.”

Since its launch, the H2R initiative has disbursed $10 million across six African countries. With IFC’s planned $25 million investment and the potential mobilization of $20 million through the IDA Private Sector Window Blended Finance Facility, the initiative aims to scale its impact significantly. The funding is expected to expand household solar electricity access, reduce reliance on kerosene and diesel, and lower greenhouse gas emissions.

The initiative also contributes to Mission 300, a collaborative effort by the World Bank Group and the African Development Bank to connect 300 million Africans to electricity by 2030. IFC’s support builds on Acumen’s two decades of experience in investing in enterprises that deliver energy solutions to low-income, off-grid communities. To date, Acumen’s energy portfolio has impacted more than 300 million lives and prevented over 50 million tons of greenhouse gas emissions.

The investment highlights the importance of innovative financing in addressing Africa’s energy challenges and advancing global climate goals, including achieving universal energy access under Sustainable Development Goal 7. As Jacqueline Novogratz noted, “With IFC’s partnership, we can scale this impact and move closer to clean energy access for all.”