Schneider Electric, a global specialist in energy management, in partnership with the European development finance institutions, has launched the Energy Access Fund (EAF) to improve access to sustainable energy in Sub-Saharan Africa.

Other partners in the EAF are the CDC Group, the UK Department for International Development (DFID), the European Investment Bank; OPEC Fund for International Development, the Investment and Support Fund for Businesses in Africa (FISEA), PROPARCO, the French Global Environment Facility and the French Development Agency.

Christophe Poline, Sustainable Investments Manager at Schneider Electric, said: “This fund is an important part of Schneider Electric Social Responsibility program dedicated to the promotion of access to electricity.”

“We recognized that the financing needs and the impact management require professional expertise. That the reason why we created this partnership where DFI and the other partners provide financing and impact management expertise and Schneider Electric technical and Business expertise,” he told Africa Global Funds.

The fund has secured commitments of €54.5m ($60.9m) to invest in 5-year instruments for around 20 African small and medium enterprises (SMEs).

Tareq Alnassar, Head of the Department of Private Sector and Trade Finance of OFID, said: "Investing in this fund is a part of our multi-pronged approach to our Energy for the Poor Initiative, which was launched in 2008 and aims to contribute to the eradication of energy poverty."

"The fund managers will work with its sponsor and co-investors to provide a unique mix of economic investment, innovation, and skill development to help small companies that provide electricity access solutions in rural areas. The fund will target the underserved mini grid projects in some of the poorest countries in the region adding to the developmental benefits of this initiative," he said.

As of the end of 2014, OFID had approved nearly $3.9bn, almost one-quarter of its commitments, in support of energy-related projects ranging from the construction and rehabilitation of infrastructure and installation of household connections, to research and capacity building.

When asked about opportunities in the energy sector, Alnassar said: "As a multilateral development finance organisation, meeting the financing gap in the sector and supporting underserved segments of the population is our focus. We see more need for supporting independent power projects (IPPs) in the continent, which would help to relief the budget deficit we observe in a number of countries and allow governments direct these resources to other social and economic sectors."

Poline said that prior the fund launch, the firm was running a pilot fund, Schneider Electric Energy Access, that has made four investments in Africa.

Energy poverty is one of the greatest hindrances to socio-economic development in low-income countries.

In Sub-Sahara Africa alone, well over 600 million people are living without access to a reliable, affordable and sustainable source of energy.

The new fund will transform lives and stimulate economic development across Africa by providing access to electricity for a million people by 2020.

The Fund will target smaller businesses in Africa that specialize in promoting low-carbon and low cost electricity access solutions in rural areas and close to main towns and that cannot access regular finance.

Targeted countries include Burundi, Ethiopia, Kenya, Malawi, Mozambique, Rwanda, Tanzania, Uganda, Zambia and Zimbabwe.

Poline said: “There are more than 600 million people without access to electricity in Africa and this number is likely to remain stable as population is growing faster than energy access. Energy access is bound to remain a hot issue in the coming years.”

In addition to funding, a range of technical support will be provided to offer practical help and advice for local businesses concerning management, governance, energy efficiency, and environmental best practices.

The Fund will also provide the following resources to its selected beneficiaries: access to skilled professionals via Schneider-Electric operations staff (engineers, procurement specialists, marketing experts and engineering consultants) to support local businesses and share their skills to reinforce existing human capital; a social and environmental impact assessment of their activities to help reduce their environmental impact; and technical advice to help meet international compliance regulations.

The Fund will be backed by the experience acquired as the investment arm of the Schneider Electric Energy Access fund (SEEA), to help develop entrepreneurial initiatives to improve access to energy.

The Fund will be managed by Aster Capital and advised by Energy Access Venture company based in Africa.