Shell
Foundation commits $10 million for energy funds in developing countries
Posted: 04 May 2004
The Forum for the Future calls on banking community to
match commitment
The Shell Foundation announced a new investment of $10 million
to establish energy funds in developing countries at a workshop
Sustainable Investment in Developing Countries: Pipedream
or Possibility? hosted by the Shell Foundation and The
Forum for the Future.
The funds will provide business development support and finance
to local small and medium sized enterprises (SMEs) - assisting them
to overcome the technical and financial barriers to setting up a
sustainable business and thereby bringing vital energy supplies
to poor communities.
The workshop also coincides with the inaugural meeting of UK Prime
Minister, Tony Blair's Commission For Africa.
Jonathon Porritt, Programme Director of The Forum for the Future,
said: "We welcome this new investment from the Shell Foundation,
and call on the banking community to match their commitment dollar
for dollar.
"Until recently, investing in SMEs in developing countries,
and especially Africa, was left almost exclusively to development
finance organisations and charities. For commercially driven private
financial institutions, there were easier ways to make money. Slowly,
this situation is changing but private financial institutions must
do more.
"There are numerous innovative ways to invest - from micro-finance
to project finance - and return rates are very good. Supporting
smaller enterprises in the developing world is the best way to boost
local economies."
The Shell Foundation's new commitment is in addition to the $5
million already invested in existing funds in Uganda and South Africa.
The Empowerment Through Energy Fund, launched in South Africa in
2003, is a partnership between the Shell Foundation, Absa Bank,
Industrial Development Corporation and RAPS Finance. It provides
both business development services and risk capital to SMEs in the
pro-poor energy sector.
The Uganda Energy Fund, launched in 2003 in partnership with the
local bank DFCU, has supported over 100 beneficiaries since launch,
demonstrating the vibrancy of the SME energy market.
Chris West, Deputy Director of the Shell Foundation, said: "As
a
continent, Africa has abundant energy resources, but the majority
of poorer households still lack access to clean and affordable energy
services. There is simply not enough public finance or development
funding to meet energy needs and thereby improve the lives of the
poor.
"So the active involvement of the private sector is required.
Yet many SMEs are unable to enter the energy market and provide
the services needed because they lack essential business skills,
do not have bankable business plans and cannot raise capital from
local financial institutions. We hope our new funds will help to
overcome these issues and, in turn, advance local economies."
The new $10 million commitment will be invested over the next three
years, primarily in Africa and the Asian subcontinent. The
Shell Foundation is currently seeking partners from the commercial
finance sector to match the funding.
For more information see www.shell.com
Posted by Richard Price,
Editor Pipeline Magazine
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