UK Development Institution Commits $20M to Accelerate Clean Energy Access in Africa’s Hardest-to-Reach Communities

British International Investment, the United Kingdom’s development finance institution and impact investor, has announced a strategic $20 million commitment to Acumen’s Hardest-to-Reach Initiative, marking a significant step forward in addressing Africa’s persistent energy poverty crisis. The investment, channeled through the initiative’s debt-focused vehicle known as H2R Amplify, aims to expand access to affordable, reliable, and clean energy solutions in frontier economies across sub-Saharan Africa.

This commitment comes at a critical juncture as nearly 600 million Africans continue to live without access to electricity, representing approximately half the continent’s population and more than 80 percent of the global electricity access gap. Women and girls bear a disproportionate burden of this energy poverty, spending countless hours collecting firewood and kerosene while facing significant health risks from indoor air pollution caused by traditional cooking methods.

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Innovative Financing Model Attracts Commercial Capital

The Hardest-to-Reach Initiative represents a groundbreaking approach to solving one of Africa’s most intractable development challenges. Operating through a dual-vehicle structure, the program combines patient capital with innovative debt financing to catalyze private sector investment in regions that traditional investors have historically overlooked or deemed too risky.

H2R Amplify, the vehicle receiving BII’s investment, will deploy innovative financing mechanisms to established off-grid solar companies operating in the most underserved countries in sub-Saharan Africa. These target markets face severe electrification challenges, with national grid access rates ranging from just 59 percent to as low as 12 percent in some countries. The financing instruments include impact-linked loans and receivables-backed financing designed to help solar companies manage working capital challenges as they scale operations in difficult operating environments.

The vehicle has already achieved a significant milestone, securing $123 million in commitments at its first close. This success demonstrates growing investor appetite for catalytic capital that can de-risk fragile markets while maintaining commercial viability. The blended finance structure offers risk protection and enhanced returns through a tiered model that makes participation attractive to both development finance institutions and private commercial investors.

H2R Catalyze, the initiative’s complementary patient capital arm, has separately raised $57 million since its launch in 2023 and is already actively investing in early-stage clean energy companies. Together, the two vehicles have mobilized approximately $246.5 million in approved and committed capital, marking this as one of the most significant blended finance initiatives dedicated specifically to household solar systems in Africa’s most challenging markets.

Targeting 17 Frontier Markets Across Sub-Saharan Africa

The initiative focuses its efforts on 17 countries that face some of the lowest electrification rates globally and where energy poverty intersects most acutely with economic poverty. These target countries include Malawi, Sierra Leone, Uganda, Zambia, Benin, Burundi, Burkina Faso, Chad, the Democratic Republic of Congo, Guinea, Guinea-Bissau, Lesotho, Mozambique, Niger, Somalia, and Togo.

Many of these nations have been overlooked by mainstream off-grid solar investors despite hosting the majority of Africa’s unelectrified population. Data shows that Western, Central, and Southern Africa account for 71 percent of the region’s unelectrified population but received just 24 percent of cumulative off-grid solar investment between 2012 and 2019. This massive investment gap has left approximately 278 million people across these 16 geographies without access to modern electricity services.

The concentration of investment in more stable East African markets, while understandable from a risk perspective, has created a dangerous disparity where the poorest and most vulnerable communities remain trapped in energy poverty. The H2R Initiative aims to correct this imbalance by providing the precise mix of financing and risk mitigation that solar companies need to enter and sustainably operate in these more challenging environments.

Expected Impact: Transforming Lives and Combating Climate Change

With BII’s support and contributions from other institutional investors, H2R Amplify is expected to reach more than 50 million individuals across its target markets, including approximately 40 million people who will gain first-time access to clean energy products. This represents a transformative opportunity to improve quality of life, enable economic productivity, and create pathways out of poverty for millions of African families.

The environmental benefits are equally significant. The initiative is projected to mitigate over 3 million tonnes of carbon dioxide equivalent emissions by displacing highly polluting fuels such as kerosene, diesel, and charcoal. This contribution to climate mitigation comes while simultaneously advancing development goals, demonstrating that economic development and environmental sustainability can progress hand-in-hand when properly structured.

Off-grid solar solutions have emerged as the most cost-effective and rapid means to provide basic electricity for more than 40 percent of those who remain globally unelectrified by 2030, according to the World Bank and GOGLA’s 2024 Off-Grid Solar Market Trends Report. Between 2020 and 2022, distributed energy solutions provided 55 percent of new connections in sub-Saharan Africa, where 80 percent of the world’s unelectrified population lives.

Advancing Gender Equality in the Energy Sector

A particularly notable aspect of the H2R Amplify investment is its qualification under the 2X Challenge, reflecting a strong institutional commitment to advancing gender equality throughout its operations and investments. Women disproportionately suffer the consequences of energy poverty, serving as primary household energy managers while remaining significantly underrepresented in the clean energy workforce.

The initiative addresses these disparities through multiple channels. Acumen will support Gender Action Plans at portfolio companies and provide gender-focused technical assistance to help improve gender-inclusive practices across the off-grid solar sector. The initiative will also enhance collection of gender-disaggregated data to track progress and ensure accountability in advancing women’s economic empowerment.

By expanding women’s access to clean energy as both customers and employees, the initiative creates transformative economic opportunities. Reliable electricity enables women entrepreneurs to extend business hours, improve productivity, and access digital tools for education and commerce. Employment opportunities in the growing clean energy sector provide pathways to formal employment and skill development that have historically been unavailable to women in rural communities.

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BII’s Expanding Climate Finance Portfolio

This investment in the H2R Initiative aligns with BII’s broader strategic commitment to climate finance and energy access. The institution has dramatically scaled its climate-related investments in recent years, committing approximately $903 million to climate finance in 2024 alone, representing 41 percent of its total commitments for the year.

This represents a remarkable acceleration from just $104 million in climate finance in 2020, demonstrating a compound annual growth rate that reflects the urgency of climate action in emerging markets. Climate finance assets now constitute over 26 percent of BII’s entire portfolio, up from just over 15 percent in 2020. Over the past three years, BII has channeled more than $2 billion into climate finance initiatives across its investment regions.

Africa remains BII’s largest regional focus, with the continent accounting for approximately 62 percent of the institution’s total investment portfolio. In 2024, BII committed £1.09 billion to African companies, representing a nearly 40 percent increase from the previous year’s £725 million. This exceptional growth comes despite challenging macroeconomic conditions and underscores BII’s unwavering commitment to African development.

Under the leadership of CEO Leslie Maasdorp, who joined BII in autumn 2024 from his previous role as vice-president and chief financial officer of the New Development Bank in Shanghai, the institution has deepened its focus on frontier markets across the continent. These are countries that historically have not attracted significant multinational investment due to perceived risks related to weak regulatory frameworks, underdeveloped infrastructure, and political instability.

Partnership with Development Finance Institutions

BII’s commitment to H2R Amplify positions the institution alongside a coalition of prominent development finance institutions and impact investors committed to solving energy poverty at scale. The Green Climate Fund serves as an anchor contributor to the initiative, while other participants include the International Finance Corporation, Seoul-based Shinhan Bank, the Soros Economic Development Fund, the Nordic Development Fund, the Signify Foundation, and ImpactAssets.

The IFC has approved up to $45 million in investment through its own account and via blended finance facilities, while the Nordic Development Fund has committed $10.5 million in concessional funding. This multilateral approach brings together public, private, and philanthropic capital in an unprecedented coalition designed specifically to reach the hardest-to-serve populations.

Jacqueline Novogratz, Acumen’s Founder and CEO, emphasized the significance of this collaborative model: “Acumen’s Hardest-to-Reach initiative is a vital step toward solving energy poverty for communities often overlooked in the climate transition. For too long, we’ve under-invested in these areas and underestimated their potential.”

The initiative was originally developed by Acumen with UK research and innovation support through the Transforming Energy Access platform, demonstrating how early-stage grant funding can catalyze innovative financing models that eventually attract significant commercial capital. This progression from concept to scaled implementation exemplifies the type of development finance innovation needed to address Africa’s most intractable challenges.

Complementing Mission 300 and Continental Electrification Goals

The H2R Initiative serves as a crucial complement to Mission 300, a joint initiative launched by the World Bank Group and the African Development Bank in January 2025 that aims to connect 300 million people to electricity across Africa by 2030. The World Bank has pledged to facilitate 250 million connections while the African Development Bank has committed to delivering 50 million connections through this partnership.

Achieving universal energy access by 2030 requires connecting approximately 90 million people annually, triple the rate achieved in recent years. This scale of transformation demands not only massive capital deployment but also innovative business models, supportive policy environments, and risk mitigation mechanisms that can attract private sector participation at unprecedented levels.

The off-grid solar sector will play a pivotal role in achieving these ambitious targets. While grid extension remains essential for urban and peri-urban electrification, distributed renewable energy systems offer the fastest and most cost-effective pathway to reaching rural and remote populations. Based on geospatial modeling conducted by the World Bank, distributed renewable energy represents the optimal solution for more than half of the currently unelectrified population in sub-Saharan Africa.

Broader Development Finance Context

The H2R investment exemplifies BII’s institutional strategy to address economic inequality and catalyze private sector growth in Africa’s most fragile and underserved regions, which often struggle to attract commercial capital. This commitment is further demonstrated through the Africa Resilience Investment Accelerator, a platform created by BII to work with development partners to de-risk investments and unlock opportunities in fragile and conflict-affected countries.

ARIA brings together BII with other European development finance institutions including France’s Proparco and the Netherlands’ FMO to coordinate investments in countries facing significant stability challenges. By pooling resources and sharing due diligence, these institutions can achieve risk mitigation that no single investor could accomplish alone, thereby opening investment opportunities in countries that would otherwise remain off-limits to most capital providers.

BII has been investing in Africa for over 75 years, providing long-term capital that supports the growth of productive, sustainable, and inclusive economies. With a portfolio of approximately $5.6 billion invested across more than 800 companies in Africa, the institution uses its capital to back businesses that drive local economies, build infrastructure that connects people, and create jobs and services that help communities thrive.

The institution’s total net assets expanded to £9.9 billion in 2024, marking a substantial increase from £8.5 billion in 2023. Perhaps most notably, BII achieved post-tax profits of £213.3 million in 2024, a remarkable turnaround from the £44 million loss recorded in 2023, demonstrating that impact investing can generate both development outcomes and financial sustainability.

Looking Ahead: Scaling Impact Through Innovation

As H2R Amplify begins deploying capital to off-grid solar companies across its 17 target markets, the initiative will test whether its innovative financing structures can successfully catalyze broader private sector participation in Africa’s most challenging energy markets. Early investments have already been made in companies such as Yellow Malawi, which provides off-grid solar panels and smartphones, RDG Collective, which operates a last-mile distribution model in Zambia, and KIMS Microfinance in Somalia.

The success or failure of this initiative will carry implications far beyond the energy sector. If the H2R model proves that appropriately structured blended finance can make commercially viable investments in frontier markets that were previously considered unbankable, it could pave the way for similar approaches in agriculture, healthcare, education, and other critical sectors where development needs are most acute but traditional investors remain absent.

For the 50 million Africans expected to benefit directly from H2R Amplify’s investments, the stakes are profoundly personal. Access to electricity transforms daily life in ways that residents of electrified regions often take for granted. Children can study after dark. Health clinics can refrigerate medicines and operate life-saving equipment. Entrepreneurs can charge mobile phones that connect them to information, markets, and financial services. Communities can pump clean water and operate small-scale productive equipment that generates income and employment.

As Chris Chijiutomi, Managing Director and Head of Africa at BII, emphasized: “BII is a trusted and long-term partner to African nations and the continent’s world class community of entrepreneurs and business leaders. Our 2024 investment performance demonstrates our unwavering commitment to supporting African companies at a time when investment to create quality jobs, reduce aid dependency and meet the challenge of the climate emergency has never been more vital.”

The $20 million commitment to Acumen’s Hardest-to-Reach Initiative represents more than a financial transaction. It embodies a vision of development finance that prioritizes the most vulnerable, catalyzes broader private sector engagement, advances climate action, and demonstrates that with appropriate innovation and risk-sharing, even the hardest-to-reach communities can access the energy they need to build better lives for themselves and future generations.

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By: Montel Kamau

Serrari Financial Analyst

1st October, 2025