IFC and Rockefeller Foundation to Co-finance RE Development in Africa

The International Finance Corporation, the private sector arm of the World Bank Group, and The Rockefeller Foundation (RF) yesterday announced a new partnership to finance renewable energy development in Sub-Saharan Africa and some other regions.

The joint venture aims to deploy $150 million of RF’s catalytic capital in blended finance to mobilize up to $2 billion of private sector investment in distributed RE solutions.

The Rockefeller Foundation President, Dr. Rajiv J. Shah, said, “The best partnerships are informed by a common goal and an experience of learning together so by combining the expertise and resources of The Rockefeller Foundation with the global footprint of the IFC, we are demonstrating the power of partnerships to deliver real impact.”

The collaboration will prioritize countries in Sub-Saharan Africa and select other regions, where both organizations have identified immediate opportunities. Eventually, the list of countries where this partnership will deploy will be broadened during implementation.

By blending philanthropic and private investment funding, the Rockefeller Foundation and IFC aim to de-risk capital investment in distributed renewable projects in emerging markets and help to address global energy access needs.

An initial “rapid deployment” phase will distribute $30 million in blended concessional finance and grant capital to leverage an active pipeline of distributed renewable energy projects developed by IFC. The funding will go toward IFC’s prototype scaling mini-grid program in addition to distributed renewable energy generation, battery energy storage, and other innovative clean energy technologies to facilitate access.

Several of these components are part of IFC’s Upstream practice, which aims to create markets in the most challenging environments and lays the foundation for future investment projects. The work includes technical assistance, targeted feasibility studies, and cost-sharing support to private sector clients and governments.

The COVID-19 pandemic has disrupted progress on achieving clean energy for all, with the number of those lacking electricity in Africa rising to more than 590 million people in 2020, an increase of 13 million people, or 2%, from last year, according to the analysis in the World Energy Outlook 2020.

IFC is a leading financier of low-cost renewable energy, having funded projects with a generation capacity of approximately 8 GW in hydropower, 6 GW in solar energy, and 5 GW in wind energy.

IFC Managing Director Makhtar Diop said, “The climate challenge at its core is an energy challenge. The twin goals of improving energy access and addressing climate change both require our urgent attention but can’t be achieved with public resources alone. The private sector can and must be part of the solution if the scale of our results is to meet the scale of our ambitions.”

In a joint statement, the IFC, which is the largest global development institution focused exclusively on the private sector in developing countries, and The Rockefeller Foundation, a globally renowned philanthropic organization with a decade of expertise in the distributed renewable energy sector, have said that the collaboration between them is part of both organizations’ commitment to ending energy poverty and delivering reliable, sustainable power to millions across the world. Together, the two hope to mitigate risk and aim to invest towards high impact projects in challenging sectors and countries.

In India, among other things, the Rockefeller foundation is behind Smart Power India, and TP Renewable Grids with Tata power, to focus on energy access for all.