The Overseas Private Investment Corporation (OPIC) and the Calvert Foundation have signed financing agreements with impact investor Pamiga Finance to help them expand their lending operations to consumers and small businesses in sub-Saharan Africa.
Under the terms of the agreement, OPIC will provide $4.75 million in senior debt, with the balance of $1.5 million being provided by the Calvert Foundation. The capital forms part of a fresh $12 million PFSA lending facility that aims to provide more than 100,000 micro loans in Benin Burkina Faso, Cameroon, Kenya, Madagascar, Senegal, Tanzania and Togo over the next 7 years. Further financial support for the establishment of the PFSA lending facility came from the Swiss Agency for Development & Cooperation and the European Investment Bank.
According to Mathieu Merceret, Pamiga’s Chief Investment Officer, “Financing access to solar energy for the poor in rural Africa has a huge social impact: more kids can study at night and in safer conditions; people can charge their mobile phones to trade, send money, and communicate; public premises such as markets, dispensaries, and schools get light and refrigeration. Small entrepreneurs no longer depend upon rising oil prices to use their machinery. Financing access to irrigation water enables the sub-Saharan farmers to no longer depend upon the rain season and climate hazards. They can grow all year round and improve their livelihood and food security whilst monitoring their footprint on the environment.”
Pamiga Finance initially received a small amount of early stage capital from the African Clean Energy Finance (ACEF) Initiative and is the first ACEF project to receive follow-on OPIC project financing. The program is now an essential part of the Power Africa Initiative.
OPIC’s loan is the first to be financed through the Portfolio for Impact, a pilot program that supports large-scale, hard-to-finance but highly developmental impact investment projects.