French asset management firm, Eiffel Investment Group is partnering with Finergreen, an investment advisory firm dedicated to renewable energy, to launch a pan-African bridge loan strategy to accelerate electrification and energy transition in the continent. Initially, the fund will mobilize a $200 million investment.
The new initiative to be launched aims to provide start-up capital before long-term investments for projects in renewable energy. The European Investment Bank (EIB) has started the verification process to invest 30 million euros in this fund, becoming its largest contributor. Eiffel and Finergreen are targeting a market estimated at 523 million euros (~$600 million) per year and will do so by obtaining investments from public and private institutions.
The financing is intended to bridge the gap between an unforeseen event and a long-term financing solution, avoiding liquidity shortages. According to Eiffel, the program will be launched in the first half of this year and address the growing demand for bridge financing in Africa.
Fabrice Dumonteil, the President of Eiffel Investment Group, said, “As is often the case, raising capital from international investors, multilateral organizations, development banks, and local partners can be a long and complex process. Also, the unavailability of long-term capital when projects are ready to enter the construction phase is a major factor in the slow deployment of renewable energy on the continent.”
Eiffel Investment Group along with other independent developers has financed more than 1,900 renewable energy projects in Europe and beyond, over the past five years. The asset management firm was able to test the importance of bridge financing by granting EUR 3 million funds to ManoCap Energy for the installation of renewable energy systems for productive use in African countries such as Ghana and Sierra Leone.
