Shell Foundation, a UK-born charity organization, has signed a Memorandum of Understanding (MOU) with International Development Finance Corporation (DFC), an American financier, to strengthen their joint initiative to light up low-income regions in Africa and Asia.
This MOU will elevate both organizations’ ability to provide renewable energy solutions to households who live on $2 to $10 a day and whose residences are in off-grid areas. This initiative will improve household income, education access, health services access and empower masses economically, especially women.
More than 800 million people in the world don’t have access to electricity. Furthermore, according to DFC’s press statement, around 2.8 billion people have access to electricity, but it is not reliable. This initiative targets small to medium-sized startups owned, led, or supported by women and whose activities seek to solve this electricity challenge.
Lack of reliable electricity supply has hindered economic growth in these low-income areas. It has also caused a sluggish recovery from the Covid-19 impact. Shell Foundation and DFC have come together to provide financial assistance to startup companies and lay a foundation for distributed renewable energy (DRE).
“Innovative DRE enterprises are already providing more affordable, more reliable energy to tens of millions of people who cannot access the grid, mostly in ways that are far more cost-effective and quicker to deploy, yet they are unable to access significant growth investment,” said Sam Parker, CEO of Shell Foundation.
“DFC is particularly forward-thinking in acting to address this. By lending our capital and by working with shared partners such as the Foreign, Commonwealth, and Development Office (FCDO) and Rockefeller Foundation, we can bridge the gap between social and commercial investors, unlock substantial funding and enable hundreds of millions of people to escape energy poverty by 2030,” Parker added.
The UK charity will give grants worth about $45 million to create and develop high-impact ventures that will deliver distributed renewable energy to residences, farmers, and enterprises in off-grid areas.
On the other hand, DFC will offer up to $100 million seed money to support the growth of these startups. Once these businesses meet DFC’s requirements to access the funds, the financier will hop into their other projects to scale up the renewable sector’s development in Africa and Asia.
Besides the DFC, Shell foundation has collaborated with FCDO, Power Africa, and the US Agency for International Development. Adding DFC to this list will increase the source of funds and combat the risk involved with funding startup businesses in underdeveloped sectors such as the renewable energy sector. DFC has also partnered with the Rockefeller Foundation in other DRE investments.https://goodnewsgum.com/