Sponsoring Agency: U.S. International Development Finance
Type of Fund: Grant
Deadline Available: Available
Deadline Date (mm/dd/yyyy): 06/18/2021
Size of the Fund: More than $1 Million
U.S. International Development Finance Corporation (“DFC”) is launching a call for applications (the “Call”) from private sector entities seeking support for distributed renewable energy (DRE)-related investments in DFC-eligible emerging market countries via equity financing, debt financing, political risk insurance, feasibility studies, technical assistance, and related DFC products.
DFC seeks to commit up to $100 million in approximately 3-10 projects in direct U.S. Government financing or other investment support for DRE-related investments in DFC-eligible countries within one year of launching this Call. Investments can be used for business expansion, working capital, and growth capital. Selections will be conducted through a competitive process. DFC has sole discretion in making selections, including policy priorities, market needs, and the ongoing construction of a balanced and diversified portfolio. After the first year, DFC will evaluate its DRE portfolio and determine whether to set subsequent incremental targets for investment support to the sector to achieve the goals set in DFC’s Roadmap for Impact.
All DFC-eligible countries, with a special focus on low Income and lower-middle income (as defined by the World Bank).
• Equity financing
• Debt financing
• Political risk insurance (PRI)
• Feasibility studies & technical assistance
Investment Qualifications & Characteristics
• Applicants should be seeking DFC support for private sector-led investments that support the DRE sector, including, but not limited to:
o Mini-grid or micro-grid deployment
o Grid-connected local generation and storage
o Renewable power solutions for commercial and industrial use
o Battery storage and productive use (e.g., battery swapping platforms)
o Solar home systems
o Private electricity distribution networks that are powered primarily by renewable energy
o Power distribution companies (or subsidiaries of power distribution companies) that focus on rural, or last-mile electricity access
o Debt funds with DRE-focused downstream borrowers
• Priority will be given to those projects that provide individuals, businesses, or public institutions with the highest levels of electricity access, as defined by the World Bank’s Matrix for Measuring Access to Levels of Electricity.
• Priority will be given to projects that provide energy solutions related to the COVID response, such as those projects that will provide needed electricity to healthcare facilities.
• DFC welcomes opportunities to provide financing to locally owned and operated companies.
• Additional consideration will be given to proposed investments that support DFC’s development strategy Roadmap for Impact, which prioritizes investment in projects in the infrastructure and technology, healthcare, water & sanitation, financial inclusion, and energy sectors. In addition, DFC will look to prioritize projects that advance other USG government priorities, including to enhance two-way trade and investment between the U.S. and Africa as envisioned by the U.S. Government’s Prosper Africa initiative; investments that support women through the DFC’s 2X Women’s Initiative; investments that support underserved3 and disadvantaged4 populations; and investments that complement other U.S. Government global renewable energy programs such as Power Africa.
• Proposed opportunities and target countries should be described in the applicant’s submission.
• The investment thesis should reflect the management team’s prior experience and track record of impact and financial performance.
• DFC is targeting individual investments of at least $3 million.
• Applicants must be privately owned and managed entities.
• DFC does not offer stand-alone technical assistance or feasibility study grant funding. Any application for technical assistance or feasibility study support must be for a project that may receive, or has received, DFC financing, equity investment or insurance.
• Companies must submit a complete application by the application deadline and the business plan must include the content outlined in the attached “Overview of a DRE Business Plan” document. DFC will evaluate credibility and thoughtfulness of the application and consistency and clarity of the investment thesis and proposed strategies.
• Eligible companies must: 1) have an experienced, credible and cohesive management team with a demonstrated track record developing, raising financing for, and successfully deploying and operating comparable DRE projects, 2) demonstrate they are profitable or are approaching profitability, and 3) provide at least two years of audited financial statements.
• Companies must show a compelling business plan that addresses a market opportunity and logistics delivery capacity needed to offer renewable energy solutions.
• The management team must have experience servicing debt obligations or acting as a fiduciary in managing institutional capital, and meeting reporting requirements.
• The company must demonstrate the ability to raise equity and, as applicable, to mobilize additional capital within a reasonable time.
• The application must demonstrate how the proposed investments may have a sustainable, positive developmental impact on the host country/countries in support of country priorities in areas including, but not limited to electricity access, job creation, infrastructure improvements, social policies, gender lens investing, and corporate social responsibility initiatives, as well as innovation, technology and knowledge transfer.
• The project must comply with DFC’s policies related to environmental and social sustainability as well as respect for human and workers’ rights.
• The project must be able to specify and meet pertinent metrics, articulate how and why it will produce specific outcomes, and evaluate performance.
• DFC prefers, but does not require, a “U.S. Connection,” which means that the project company must either (i) be a U.S. entity that is at least 25% U.S.-owned or a foreign entity that is majority U.S.-owned, OR (ii) raise investment capital from U.S. investors that is equal to or greater than 25% of the DFC loan or other support.
More information at: https://www.dfc.gov/media/press-releases/dfc-announces-call-applications-distributed-renewable-energy-projects