An innovative blended finance instrument which invests in the provision of clean utility services for low-to-moderate income households, a market segment currently underserved in terms of climate financing and clean utility solutions.
The sub-ordinated credit fund is structured as a permanent capital vehicle and aims to raise USD 70m in both concessionary and commercial funding . The instrument has been designed as a flexible structure to efficiently allocate risks and returns across a diverse funder group. The vehicle aggregates capital to provide credit enhancement to utility SPVs set up to serve major affordable housing landlords. The Fund will act as an impact investor, financing projects that target competitive market-linked returns technology.
Key Fund Features:
Unlocks an overlooked low- and moderate-income (LMI) utility market segment through the aggregation of utility demand.
Mobilises concessionary capital to provide affordable clean utility services to households, deviating from common utility contracts. Offers a wide variety of utility infrastructure and technology: comprehensive approach to reducing utility costs.
Blended finance model backed by a guarantee to support portfolio-driven risk mitigation, and crowd-in commercial capital,
The Clean Utilities Technical Assistance Facility (TA) is linked to Mzansi Clean Energy Capital fund. The TA facility provides technical support to the fund’s customers and capacity building to key sector stakeholders. Landlords are assisted with scoping clean utilities projects aligned with the fund’s impact targets and transitioning to low-carbon buildings.
Key TA Activities:
Support landlord capacity to develop portfolio energy management plan and scope clean utility projects; and upskill households on sustainable utility management.
Develop project operational systems and risk mitigation strategies.
Address bottlenecks in project delivery ecosystem with key project stakeholders & subject matter experts.
Research and development of selected clean utility technologies in targeted housing units.
Key TA Outcomes:
Capacity building for landlords, tenants and EPC service providers, ensuring these stakeholders are equipped to transact with fund.
Develop a roadmap for integrating energy-saving technologies suited to LMI households.
Crowd-in private sector capital into the fund and contribute to the development of a local green workforce.
Identify suitable technology partners and opportunities for technology transfers; share project case studies which contribute to industry best practices.