IFC Commits $25M to Acumen’s H2R Initiative, Expanding Access to Clean Energy in Sub-Saharan Africa

Blended Finance Initiative to Provide Solar Power to Millions, Catalyzing Market Growth and Supporting Africa's Energy Transition.

At the 29th U.N. Climate Change Conference of the Parties (COP29) in Baku, Azerbaijan, the International Finance Corporation (IFC), a member of the World Bank Group, announced that its Board of Directors had approved a significant investment in Acumen’s Hardest to Reach (H2R) initiative. This groundbreaking initiative is the first blended finance program focused on providing clean, affordable solar energy to the hardest-to-reach populations in Sub-Saharan Africa, where nearly 600 million people lack access to basic electricity.

IFC’s investment of up to $25 million from its own account is a crucial step towards addressing Africa’s massive energy access gap. “IFC’s investment in Acumen’s H2R initiative underscores our commitment to tackling energy poverty in Sub-Saharan Africa,” said Makhtar Diop, Managing Director of IFC. “This initiative will help activate off-grid solar markets, supporting both international companies in expanding their reach and local businesses in scaling their operations sustainably.”

The H2R initiative will utilize flexible, impact-linked debt and patient capital to support off-grid solar companies across the region. According to the World Bank and GOGLA’s 2024 Off-Grid Solar Market Trends Report, off-grid solar systems are poised to be the most cost-effective and fastest means of providing electricity to over 40% of the population still living without power. Between 2020 and 2022, distributed energy solutions accounted for 55% of new connections in Sub-Saharan Africa, a region that is home to 80% of the world’s unelectrified population. These solutions are crucial for unlocking economic potential and improving the quality of life for millions.

Jacqueline Novogratz, Founder and CEO of Acumen, emphasized the importance of the initiative, stating, “Acumen’s Hardest-to-Reach initiative is a vital step toward solving energy poverty for communities often overlooked in the climate transition. By leveraging IFC’s partnership, we can significantly scale this impact and move closer to universal clean energy access.”

To date, the H2R initiative has disbursed $10 million across six African countries, providing access to solar-powered electricity while reducing reliance on kerosene and diesel, which also lowers greenhouse gas emissions. This initiative aligns with the World Bank Group and African Development Bank’s Mission 300, an ambitious goal to connect 300 million people to electricity by 2030.

In addition to the $25 million investment from IFC’s own account, IFC plans to mobilize up to $20 million through the IDA Private Sector Window Blended Finance Facility (IDA PSW BFF) to de-risk private investors and lower borrowing costs for solar companies. This will make it easier for them to scale and provide affordable, clean energy to millions more people.

This partnership builds on Acumen’s nearly two decades of experience in investing in and scaling enterprises that provide energy access to low-income, off-grid communities in Africa. Acumen’s energy portfolio, which includes over 40 companies, has impacted more than 300 million people and helped prevent over 50 million tons of greenhouse gas emissions.

IFC’s investment in the H2R initiative marks a significant milestone in global efforts to achieve Sustainable Development Goal 7 (SDG7) of universal energy access and supports broader global climate goals of reducing emissions and transitioning to clean, renewable energy. This collaboration reflects a growing commitment to leveraging innovative financing solutions to address the energy poverty challenge in Sub-Saharan Africa, paving the way for a more sustainable and equitable energy future for the region.