GreenMax Capital Group and First City Monument Bank (FCMB), a leading financial institution in Nigeria, have unveiled a loan product designed to support small business owners in acquiring solar refrigeration and other energy-efficient equipment through its Green4Access (G4A) platform.
The partnership was unveiled at the Africa Climate Summit in Nairobi, Kenya. It aims to assist small business owners in Nigeria looking to reduce their carbon footprint while cutting energy costs. This initiative represents a significant step towards promoting sustainable development in Africa, highlighting the importance of private sector involvement in tackling climate change.
The G4A platform is a tool designed to reduce the risks local financial institutions face when financing energy access projects. With the support of CLASP and the IKEA Foundation, G4A offers a physical Cash Deposit Fund (CDF) that covers up to 20% of the loss incurred across a portfolio of energy access loans. The primary goal of the pilot phase of G4A is to increase the participation of local financial institutions in financing off-grid energy investments.
This platform provides a unique opportunity for financial institutions to invest in energy access projects without worrying too much about the risk involved. GreenMax and FCMB are set to pilot Nigeria’s first G4A-supported loan portfolio. The primary objective of this partnership is to provide financing directly to micro, small and medium-sized enterprises (MSMEs) in Nigeria, purchasing solar refrigeration, solar water pumping, and solar generators as an alternative to diesel units.
The G4A-backed FCMB loans will eventually be offered to other pre-approved vendors of productive energy-efficient equipment. The partnership will work with the sustainable cooling technology company Koolboks to support the sale of 3,000 solar refrigerators in Nigeria through its G4A CDF placed with FCMB to support these MSMEs. These refrigerators will primarily serve women-owned businesses, enabling them to store their products longer to increase profitability.
G4A has been developed as a closed-end fund worth $50M, utilizing at least 18 times that amount in energy access investments. G4A will provide a Cash Deposit Fund to a partner Financial Institution (FI), which will then leverage Five(5) times its value in investment loans. By placing just $50M in risk mitigation facilities with partner FIs over a 12-year fund cycle, we can stimulate almost $1B in investment.
G4A is committed to supporting the attainment of SDGs 1, 3, 5, 7, and 8. It is anticipated to result in the installation of a total of 2.03 million off-grid energy systems with a combined capacity of 179 MW. This includes over 830,000 Solar Home Systems, 400 mini-grids that serve 85,600 households, 750,000 agricultural productive use systems, and 4,500 healthcare solar installations.