The Overseas Private Investment Corporation (OPIC), the US Government’s development finance institution, and the Calvert Foundation have signed financing agreements to expand the lending operations of Pamiga Finance S.A. (PFSA), an impact investment company of the Participatory Microfinance Group for Africa (PAMIGA).

PAMIGA is an initiative of CIDR and leaders in African microfinance.

For over a decade PAMIGA has been supporting access to finance for poor individuals, households, small farms and businesses in rural sub-Saharan Africa through its network of 14 locally owned African microfinance institutions (MFIs).

Elizabeth Littlefield, OPIC’s President and CEO, said: “PAMIGA is a partner whose work is proven and whose lending network is expansive. OPIC’s targeted support to PAMIGA will have an outsized effect in empowering nearly 100,000 small businesses and farms across eight African countries with the irrigation and renewable energy needed to make their operations sustainable.”

OPIC’s $4.75m senior debt joins $1.5m from the Calvert Foundation, which will help form a new $12m PFSA investment facility that is projected to issue nearly 100,000 microloans over seven years in Benin, Burkina Faso, Cameroon, Kenya, Madagascar, Senegal, Tanzania, and Togo.

Specifically, PFSA’s efforts will enable access to reliable power and water for businesses and farms by financing off-grid solar electricity kits and micro-irrigation systems.

The establishment of this single lending portfolio is projected to directly improve the lives of 582,000 Africans.

Mathieu Merceret, PFSA Chief Investment Officer, said: “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,” he said.

OPIC’s financing represents two important milestones for the Agency.

PFSA initially received a small amount of early-stage capital from the African Clean Energy Finance (ACEF) initiative, with US State Department funding administered by OPIC.

Proving the catalytic model of this program, PFSA is the first ACEF-supported project to subsequently receive OPIC project financing.

OPIC’s loan to PFSA is also the first to be financed through the Portfolio for Impact, an OPIC pilot program designed to support highly-developmental impact investment projects that, due to size and structure, would otherwise face difficulty in obtaining financing.

Further financial support for the establishment of the PFSA lending facility came from the Swiss Agency for Development & Cooperation and the European Investment Bank.

“This investment is a terrific example of OPIC’s ability to advance some of the most impactful private sector projects in the world. As the first project to emerge from OPIC’s Portfolio for Impact pilot program, PAMIGA is proof that a small group of focused visionaries can make a big difference with the right support,” Littlefield said.