African Guarantee Fund Launches $5 Billion Mission 300 Local Currency Guarantee Facility to Expand Energy Access in Africa
The African Guarantee Fund (AGF) has launched the Mission 300 Local Currency Guarantee Facility, a $5 billion initiative aimed at financing small and medium-sized enterprises (SMEs) in the Distributed Renewable Energy (DRE) sector.
This initiative forms part of the broader Mission 300 program, jointly spearheaded by the African Development Bank Group and the World Bank Group, with the goal of providing electricity to 300 million Africans by 2030.
Africa currently faces a critical energy access gap, with approximately 600 million people lacking electricity as of 2023. The continent requires an estimated $25 billion annually to achieve universal energy access by 2030. The Mission 300 Local Currency Guarantee Facility seeks to bridge this financing gap by mobilizing private sector investment and increasing the participation of local banks in the renewable energy sector.
Speaking at the launch, Wale Shonibare, Director for Energy Financial Solutions, Policy, and Regulations at the African Development Bank and a non-executive director at AGF, highlighted the initiative’s role in encouraging collaboration with African governments while leveraging concessional financing.
“The Mission 300 Local Currency Guarantee Facility will scale up the involvement of local banks in financing Distributed Renewable Energy solutions,” Shonibare stated.
AGF has played a key role in facilitating green financing across Africa, notably through the Green Guarantee Facility, which is supported by the Nordic Development Fund and the Investment Fund for Developing Countries. This facility has successfully mobilized capital for clean energy projects while reducing financial institutions’ exposure to risk.
By tackling systemic challenges such as high collateral requirements, currency mismatches, and the lack of long-term financing, AGF’s guarantee mechanisms de-risk SME lending and enhance the confidence of financial institutions in funding renewable energy projects.
Jules Ngankam, AGF Group CEO, emphasized the organization’s commitment to financial innovation and sustainable energy. “AGF’s leadership in addressing financing gaps and fostering public-private partnerships aligns seamlessly with the goals of Mission 300. This initiative will drive inclusive energy solutions, accelerate the energy transition, and significantly reduce carbon emissions,” Ngankam said.
AGF’s impact is already visible in major renewable energy projects, such as its participation in a credit guarantee syndication for a 40 MW solar plant in Madagascar. This initiative has improved electricity access for approximately 285,000 people while reducing carbon emissions by 34,000 tonnes of CO2 annually through the displacement of thermal power.
Mission 300 is a transformative program aimed at unlocking private-sector investments in Africa’s energy transition. By utilizing de-risking tools and aligning with global sustainable development goals, the initiative seeks to enhance energy security, foster inclusive growth, and build climate resilience.
AGF, rated AA- by Fitch Ratings, continues to expand its efforts in supporting SMEs across key economic sectors. Since its inception, AGF has unlocked over $5 billion in SME financing in partnership with 250 financial institutions across 44 African countries. The fund is supported by various international stakeholders, including the African Development Bank, the French Development Agency, the Nordic Development Fund, and the Mastercard Foundation.
Through strategic partnerships, innovative financing mechanisms, and a commitment to sustainability, the Mission 300 Local Currency Guarantee Facility is set to be a game-changer in Africa’s energy landscape, providing millions with access to clean and reliable power.
