EAC companies to benefit from Sh2 billion kitty

Businesses within the East African Community (EAC) operating in the renewable energy and adaptation to climate change sectors are set to benefit from a $20 million (Sh1.7 billion) funding programme.

The funds will be made available through the Renewable Energy and Adaptation to Climate Technologies (REACT) funding window of the Africa Enterprise Challenge Fund (AECF).

Through the initiative, which was unveiled yesterday, 25 businesses in the region will benefit from between Sh21.7 million and Sh130.5 million in the form of grants and loans.

The interest-free loans will be repayable after six years. Bidding companies must, however, be able to at least match the amount given in cash or in kind.

Among the beneficiaries of the new funding programme include those businesses with ideas that are profit-driven and have the potential to change the lives of people especially in arid and semi arid regions.

The idea should be able to benefit between 10 and 30 people in the areas they are being implemented.

"We will take risks that banks would not take, we will fund ideas that banks will not fund," Hugh Scott, a AECF director told a media briefing in Nairobi yesterday.

The kinds of businesses targeted are in the area of solar energy, power generation from agricultural waste, drought-resistant crops, small irrigation projects and weather insurance for smallholder farmers.

AECF REACT Window is a special funding kitty for business ideas that are based on renewable energy and adaptation to climate technologies

It seeks to help reduc rural poverty in the region by catalysing private sector investment and innovation in low cost, clean energy and climate change technologies.

The AECF is a Sh18 billion ($207million) challenge fund capitalised by multilateral and bilateral donors to stimulate private sector entrepreneurs in Africa. It enables the sector players to innovate and find profitable ways of improving access to markets and ensure markets function for the poor, particularly in rural areas.

The fund awards a mixture of grants and loans to private sector companies to support innovative business ideas in agriculture, agribusiness, renewable energy, adaptation to climate change and access to information and financial services.

Its purpose is to improve incomes of smallholder farmers and the rural poor.

The AECF is supported by the governments of Australia, Denmark, Netherlands, Sweden and the United Kingdom, as well as the International Fund for Agricultural Development (IFAD).