Grace Ashiru
The International Finance Corporation (IFC) has committed up to $25 million to Acumen’s Hardest-to-Reach (H2R) Fund, a $200 million initiative designed to enhance energy access in underserved regions of Sub-Saharan Africa. This investment by the IFC, directed towards the senior tranche of the fund, aligns with its broader strategy of promoting sustainable development in areas facing significant energy shortages. The H2R Fund, which targets the electrification of 72 million people over the next ten years and aims to prevent the release of 5 million tonnes of CO2 emissions, is structured into three equity tranches—senior, mezzanine, and junior—each worth $60 million. In addition, the fund includes a $20 million grant facility.
Acumen’s H2R Fund is aimed at supporting off-grid solar companies operating across 16 countries with low electrification rates. The fund focuses on Pay-as-you-Go (PayGo) solar businesses, which offer affordable solar home systems to low-income households by allowing them to make small, incremental payments. This innovative financing model brings clean energy to communities in areas where traditional grid infrastructure is either too costly or impractical.
The grant encourages solar companies to lower interest rates for end-users by achieving specific key performance indicators (KPIs), such as increasing the number of first-time electricity users. Acumen’s strategy ensures that investments not only deliver financial and social returns but also prioritize the needs of the most underserved communities.
Yellow Malawi, one of the companies benefiting from the H2R Fund, has recently secured a $2 million investment. This funding, structured as a two-tranche blended-currency loan, will enable the company to expand its reach to approximately 182,000 people.
Acumen, a nonprofit impact investment organization, has long been a leader in the off-grid solar sector. The H2R Fund builds on Acumen’s established history of using patient capital to support social enterprises.
The IFC’s $25 million investment underscores its commitment to advancing sustainable development through impact investing in regions with critical infrastructure needs. By holding a senior position in the fund’s capital structure, the IFC helps mitigate risks for other investors, thereby encouraging additional capital inflows into these crucial areas.
The H2R Fund employs a blended finance model, integrating commercial investment, concessional capital, and grants to achieve both financial and social returns. This approach effectively mobilizes a diverse range of capital to address energy poverty, stimulate sustainable business growth, and support global climate objectives.
Acumen’s H2R Fund is a prime example of how impact-focused capital can drive lasting change in some of the world’s most underserved markets.
