OPIC, Calvert Foundation Finalize Support to PAMIGA Finance, Spreading Renewable Resources Access in Rural Africa
May 13, 2015
Members from OPIC, PAMIGA, and the Calvert Foundation's transaction teams join together for a signing event on May 13, 2015.
- OPIC-backed microfinance facility to issue nearly 100,000 loans and impact the lives of almost 600,000 Africans
- Targeted lending will spread access to renewable, off-grid solar energy and micro-irrigation systems for populations previously underserved
WASHINGTON – The Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, and the Calvert Foundation today 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), which for over a decade has been supporting access to finance for poor individuals, households, small farms and businesses in rural sub-Saharan Africa through its network of microfinance institutions.
OPIC’s $4.75 million senior debt joins $1.5 million from the Calvert Foundation which will help form a new $12 million 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.
“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,” said PFSA Chief Investment Officer Mathieu Merceret.
“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,” said Elizabeth Littlefield, OPIC’s President and CEO. “This investment is also 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.”
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 U.S. 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. This program has become an essential part of President Obama’s Power Africa Initiative.
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.
OPIC is the U.S. Government’s development finance institution. It mobilizes private capital to help address critical development challenges and in doing so, advances U.S. foreign policy and national security priorities. Because OPIC works with the U.S. private sector, it helps U.S. businesses gain footholds in emerging markets, catalyzing revenues, jobs and growth opportunities both at home and abroad. OPIC achieves its mission by providing investors with financing, political risk insurance, and support for private equity investment funds, when funding cannot be obtained elsewhere. Established as an agency of the U.S. Government in 1971, OPIC operates on a self-sustaining basis at no net cost to American taxpayers.
All OPIC projects adhere to high environmental and social standards and respect human rights, including worker's rights. By mandating high standards, OPIC helps raise the industry and regional standards of the countries in which its projects operate. OPIC services are available for new and expanding business enterprises in more than 160 countries worldwide.
Pamiga Finance S.A. (PFSA) is a Luxembourg securitization company founded, owned and controlled by PAMIGA, a French NGO aiming at unlocking the economic potential of rural Africa, and capitalized by the Swiss Development and Cooperation Agency (SDC). PFSA raises long term debt from development finance institutions and private investors to fuel the development of sustainable delivery channels for essential services such as financial inclusion, access to water & energy, protection of habitat, development of agriculture and food security in underserved rural Africa.
PFSA works with 16 microfinance institutions member of PAMIGA network in 10 sub-Saharan countries.