As well as providing technical assistance and support to energy businesses, GVEP also assists with accessing capital for developing and constructing projects, and for starting and growing businesses.
In the developing world, the lack of access to capital is a key issue holding back the progress of small businesses –including in the energy sector.
At GVEP we believe that private capital is fundamentally the right solution, although there will frequently be an important role for public funding to catalyse and underpin private investment. In various ways GVEP can help to design and implement the right private or public/private capital solution.
support from our Advisory Team on capital structures, sources of capital and and how to approach them;
provision of loan guarantees for lenders to small businesses;
introductions to equity capital and debt capital providers known to us in our network;
capital grants, where justified, to underpin the economics for private capital;
training of financial institutions to improve their knowledge of, and appetite for the small business energy sector.
Our training programmes have so far served around 50 local financial institutions in East Africa.
GVEP operates a small loan guarantee programme to support lending by local financial institutions to small businesses. Under the scheme, GVEP takes some of the default risk on loans to small energy businesses that we believe are worthwhile, in order to increase availability of loans at improved rates. So far, the scheme has been used mainly for very small businesses, to help with the financing of equipment purchases, inventories or end-user consumer credit.
Funding from USAID and support from the Garfield Weston Foundation, Jump Up and Barclays Bank allowed GVEP to set up the fund and to work with microfinance institutions to develop loan products for energy enterprises. It was pioneered in Kenya, Tanzania and Uganda, and sought to establish a methodology that could be applied elsewhere in the developing world. So far around 135 businesses have benefitted from these arrangements and further funding to support expansion of the schemehas beed provided by the Vitol Foundation. A further development of the scheme, to allow it to support larger loans to md-sized businesses and projects, is currently in the design phase as part of our CARE2 programme.
Do you have an energy business or a business concept? Is your project based in East Africa? If you do then please fill out the Submit your business concept form to help us identify ways we may be able to support you.
Some of GVEP’s programmes include the provision of modest grants to renewable energy businesses whose profile fits with the objective of that specific programme. For example:
- Our ESME programme includes the provision of partial grant funding in Senegal, Tanzania, Rwanda and Kenya for certain energy entrepreneurs such as small hydro project developers and solar product suppliers. Some of this sourced by specific targeted calls for proposals, for example in June we invited proposals from off grid lighting companies in Kenya.
- IDEAS Energy Contest provides grants of up to $200k to innovative renewable energy projects in the Caribbean.
- The Kenya Climate Innovation Centre provides proof of concept grants for young Kenyan businesses targeting climate mitigation or adaptation technologies.
Grant funding from GVEP programmes will nearly always be combined with an engagement with GVEP to provide supporting advice - as well as grant monitoring – usually with the objective of readying the client business for follow-on private investment. At any given moment the availability of grant funding through GVEP will depend on the status and objectives of individual programmes. However, we are happy to receive enquiries on this at any time. We are also familiar with other sources of grant funding, and may be able to advise accordingly.