The Eastern and Southern African Trade and Development Bank, commonly known as PTA Bank, which is a trade and development financial institution operating in eastern and southern Africa has launched a US$ 75M facility for small and medium-sized enterprises (SMEs) operating in the off-grid energy sector.
The facility is aimed at facilitating access to debt financing for SMEs, primarily targeting renewable energy businesses in the off-grid energy sector, as well as SMEs in the broader infrastructure value chain operating in the region served by the TDB.
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“The facility is an innovative tailor-made instrument positioned to address current financing challenges faced by renewable energy and off-grid SMEs. It offers affordable financing, including working capital or capital expenditure, with longer tenors, and other non-financial incentives to unlock further financial intermediation,” explains TDB.
Beneficiaries of the facility
The TDB SME Off-Grid Facility will prioritize infrastructure projects with significant development impact and high private-sector mobilization potential and will have stringent environmental and social eligibility criteria.
They will need to provide communities with access to improved, reliable, and affordable electricity, efficient transport and logistics services, and other social and economic infrastructure. They will as well need to be done alongside enhancing the security of energy supply, creating jobs, and reducing greenhouse gas (GHG) emissions.
The primary beneficiaries of the facility will be private firms and entities in the 22 TDB member States (Burundi, Comoros, the Democratic Republic of the Congo, Djibouti, Egypt, Eritrea, Eswatini, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Mozambique, Rwanda, Seychelles, Somalia, South Sudan, Sudan, Tanzania, Uganda, Zambia, and Zimbabwe) involved in the supply, construction and operation of infrastructure projects.
Generally, the aim of the facility according to TDB is to “preserve household economic activity in the short-term and support firm productivity in the medium-term by enhancing the liquidity of SMEs involved in infrastructure value chains affected by the COVID-19 crisis”.
