The news:
- The International Finance Corporation (IFC) has pledged up to $25 million to Acumen's Hardest-to-Reach (H2R) Fund, a $200 million initiative launched to improve energy access in Sub-Saharan Africa's underserved regions.
- The IFC’s investment, allocated to the senior tranche of the fund, is part of its strategy to support sustainable development in areas with severe energy poverty.
- The H2R Fund, which aims to electrify 72 million people over the next decade while avoiding 5 million tonnes of CO2 emissions, is divided into three $60 million equity tranches — senior, mezzanine, and junior — and includes a $20 million grant facility.
Acumen’s H2R Fund is designed to finance off-grid solar companies operating in 16 countries with low electrification rates.
The fund targets Pay-as-you-Go (PayGo) solar businesses, which provide affordable solar home systems to low-income households through small incremental payments. This financing model makes clean energy accessible to communities in regions where traditional grid infrastructure is costly or impractical.
This grant incentivises solar companies to reduce interest rates for end-users by meeting specific key performance indicators (KPIs), such as the number of first-time electricity users reached.
Acumen’s approach ensures that investments benefit those most in need while generating financial and social returns.
One company benefiting from the H2R Fund is Yellow Malawi, which recently secured a $2 million investment. This funding, structured as a two-tranche blended-currency loan, allows Yellow Malawi to expand its reach to approximately 182,000 people.
Acumen, a nonprofit impact investment fund, has been at the forefront of the off-grid solar sector, and the H2R Fund builds on its legacy of deploying patient capital to social enterprises.
The IFC’s $25 million investment highlights its commitment to promoting sustainable development through impact investing in regions with critical infrastructure needs. By securing a senior position in the fund’s capital structure, the IFC mitigates risks for other investors, encouraging additional capital flow into these essential areas.
The H2R Fund uses a blended finance model that combines commercial investment, concessional capital, and grants to generate financial and social returns. This blended finance approach mobilises a range of capital to address energy poverty, promote sustainable business growth, and contribute to global climate goals.
Acumen’s H2R Fund exemplifies the potential of impact-driven capital to create lasting change in some of the world’s most underserved markets.
Written by Omoruyi Edoigiawerie, a seasoned startup attorney with over a decade of experience. Learn more.
The fund's innovative financing structure addresses energy access and promotes the long-term development of off-grid solar companies in sub-Saharan Africa.
