Household Energy Access Window

Private sector companies that are commercially active in the renewable energy market in Nigeria

To be eligible for funding, private sector companies must meet the following criteria:

• Request a grant within the stipulated range.
• Be legally registered and physically established in Nigeria as a for-profit company and must have operated for a period of no less than two (2) full accounting years at the time of application. Must not have received a grant within six (6) months before the application time.
• Be a registered (or willing to register before the start of the investment), private sector enterprise that is aligned with the focus value chains.
• Have been in operation for a minimum of two years, with the ability to produce two years of audited accounts.
• Passes AECF’s Know Your Customer), AMT/CFT (anti-money laundering and counter-financing of terrorism), PEP (politically exposed person), and IDD (integrity due diligence) screening, based on the information submitted as part of the concept note.
• Be able to show commitment to matching AECF funding based on the ratios stated in the matching contributions.
• Be compliant with fundamental laws and regulations in-country, including tax compliance laws.
• Be compliant with international human rights, labor standards, and environmental management laws.
• NOT be involved in any act of corruption. AECF requires that the applicant (including its staff, contractors, and suppliers) not be involved in offering third parties, or seeking, accepting, or being promised by third parties, for themselves or any other party any gift, remuneration, compensation, or benefit of any kind whatsoever, which could be interpreted as an illegal or corrupt practice.]
• NOT be associated with activities prohibited by the government of Sudan, terrorism, money laundering, or a list that prohibits trading with some businesses (IFC, USAID, UN, EU, and any other networks), United Nations Security Council resolutions issued under Chapter VII of the UN Charter. The screening will be conducted for all applicants and associated parties against provisions such as https://sanctionssearch.ofac.treas.gov/, worldbank.org/debarr, World-Check, EU sanctions list, etc.
• NOT be a representative of a government or a semi-governmental agency of any sort. This includes government-owned or partially owned enterprises or companies that have ownership or substantial business ties with government or quasi-government bodies. Any subsequent identification of such links will lead to the immediate termination of the grant agreement.
• Allow regular due diligence

The support package includes:

• Provision of non-repayable grants
• Provision of targeted technical assistance on business development services as required by the grantee.

Access to further funding through investment advisory and investment facilitation support.

Applicants are expected to submit a short funding application with their concept, justifying their requirements for the business and/or idea to be funded, the funding amount and the project duration.  Shortlisted applicants will be requested to submit a more comprehensive full proposal and business plan.

Funding must be additional – it must be used for a specific project, e.g., introducing new services or products, scaling up an existing product or replication/expansion to a new market.

Investees can apply for a range of funding depending on their proposed business idea/project/requirement:

• Minimum funding is EUR 100,000 while the maximum funding per grantee is EUR 800,000.

Funding is subject to meeting a certain level of match funding (see Matching Contribution). Businesses should apply for funding depending on their project requirements and capacity to absorb funding for the proposed project. Funding will be in the form of non-repayable grants and will be disbursed in US dollars, Euros, and/or local currency equivalent.

Funding payments will be milestone-based, where disbursements are based on mutually agreed milestones that must be achieved/delivered. The first disbursement will not exceed 30% of the total amount awarded.

Funding payments for inventory may be disbursed in US dollars or Euros on behalf of businesses directly to suppliers.  Operational Expenditure shall be disbursed in local currency equivalent.

Businesses are obliged to open bank accounts via an AECF local banking partner and provide invoices before each disbursement.

Duration of the funding agreement with investees: 24 months

The ETCF requires a matching contribution from the applicant to demonstrate interest, commitment, and trust from the wider investor community. Acceptance of match funding is subject to approval by the Programme Manager. Proof of the availability of matched funding is required during the selection process and before any disbursement.

The match funding requirements are:

• Matching contribution: 100% of the requested amount (At least 80% in cash and 20% in-kind)

Applicants who cannot provide matching funding in cash are still encouraged to apply, justifying why they cannot provide it. Applicants who provide cash matching funds will be prioritized in the selection process. Matching contributions can be made either all in cash or a combination of ‘in cash’ and/or ‘in kind’ as highlighted below:

In cash

Where at least one party (e.g., venture capital firm, impact investor, incubator/accelerator, foundation, or the founder) agrees to provide funding to the applicant. Evidence accepted includes a signed MoU or contract, a bank statement, and a letter confirming the total amount disbursed or to be disbursed by the other party. The submitted documents to the Fund of matching commitments must include all conditions, timescales, and any other considerations.

Examples include:

• Investment funding (equity funding)
• Impact investment
• Crowd funding
• Grants (from foundations or NGOs).
• Internal resources such as loans from founders, family, etc
• Loans from financial institutions

In-kind

In-kind matching includes any significant and quantifiable contribution to the project that is not financial. Applicants must quantify and demonstrate what results in any match given in kind will achieve for the proposed project.

In cases where in-kind matching is offered, the Fund will discuss with the applicant how best to agree on the match funding commitment and valuation. For example, a contractual agreement of support from a local incubator (providing the equivalent monetary value of the service).

Examples include:

• Use of goods, services, and facilities (such as software, real estate)
• Founders time
• Management time
• Provision and access to equipment.
• Special materials
• Technical assistance

Business models must show how they deliver and maintain social impact in their target markets and how they meet the objectives of AECF, KfW, and BMZ. Specifically, this includes the number of households and individuals gaining access to clean energy, installed power, energy savings, job creation, income improvements, women’s inclusion, market growth stimulation, and the development of relevant supply chains. Emphasis should be placed on creating jobs, reducing greenhouse gases, and promoting gender inclusivity. Companies should articulate their strategy to meet the following: Committed founders in the operations of the entity. Demonstrable benefits to the local community in terms of increased access to products and services and higher income. Qualitative indicators such as increased access to solar home systems and productive use of solar energy in rural and peri-urban communities. Show a clear end-user financing mechanism or strategy that helps target communities with low or irregular incomes access better technology, practices, and services. Proven economic development and potential improvement of livelihoods for individuals and communities. Projects must be environmentally friendly. When necessary, environmental impact assessments and mitigation measures approved by the relevant regulatory authorities should be obtained. Throughout the funding period, companies must demonstrate that they promote sustainable development outcomes in their target communities and markets. Progress in attaining the above will be measured through: Number of beneficiaries accessing high-quality technologies. Number of jobs created Increase in income for end beneficiaries selling to or buying from grantees New capacity installed from renewable energy sources Energy efficiency measures lead to a reduction in energy consumption.

Each applicant will be evaluated and scored against the following criteria:

• Geographic focus area
• Outline a commercially sustainable business model. The proposal must be technically sound and be aligned with the priority focus area. It should spell out how performance is measured and evaluated with all agreed-upon indicators, targets, and milestones.
• Must demonstrate a satisfactory performance record of the entrepreneur, technical person (s), or business. Where available, testimonials of past performance should be submitted
• The proposal must include the CV of key personnel with the education and experience required for the technical nature of the proposed project.
• The proposal must indicate the methods and degree of coordination with local administration and participating communities.
• If selling a product, ensure that it is certified in line with global standardization procedures and/ or supplied by a certified product manufacturer, clearly marked as an acceptable quality of a product.
• For existing companies, provide a track record of earning revenues from their users for existing products/services demonstrate success in at least one market.
• For existing companies, demonstrate sound financial health, including two years of audited financial accounts, established financial management processes and procedures, and dedicated financial management staff – headquarters and in-country.
• Demonstrate investment relationships/ potential to access matching funds (based on an agreed country-specific ratio), leveraging additional and follow-on funding.
• Demonstrate the capacity of the management team to implement the proposed business/project (adequate internal resources/capacity) – at headquarters and in-country.
• Demonstrate understanding of the country context and culture where the project is operating or proposing to operate.
• Demonstrate how the business model will deliver and sustain social impact in the target markets, i.e., demonstrate how to leverage AECF funding to secure commercial funding.
• In their business proposals, companies MUST describe their environmental impact and waste management policy and procedures, and demonstrate alignment to the global and respective national environmental management regulations. Grantees are expected to provide an outline of potential waste in the value/ supply chains and how they intend to manage these.
• Demonstrate how matching funds are to be made available, indicating details of when the cash will be available.
• Indicate any risks and threats to project implementation and methods that would be used to mitigate such risks

A two-step application process consisting of:

1. A concept note submitted through AECF’s template, completed online on the AECF website, that provides a summary of the business idea and background to the applicant.

For shortlisted applicants:

2. A full proposal and Business Plan, including a Three-year forward-looking projection, again using AECF’s template completed online on the AECF website.  This includes more comprehensive information to enable the assessment of the application in line with the selection criteria in Section 9 above.