49603 - Hardest to Reach (H2R) Market Expansion Fund

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Summary of Investment Information

Project Number

49603

Company Name

Acumen H2R Expansion Fund LP

Date SPI Disclosed

Oct 10, 2024

Country

Africa Region

Region

Africa

Projected Board Date

Nov 13, 2024

Environmental Category

FI-2 - Limited

Status

Pending Disbursement

Last Updated Date

Sep 30, 2025

Department

WBG Prosperity

Industry

Funds

Previous Events

Approved : Nov 13, 2024
Signed : Sep 22, 2025

Sector

Other Sector Fund

Additional Project Attributes

Blended Finance

Project Description

The proposed investment is for (i) up to US$25 million from IFC’s own account in the senior tranche and (ii) up to US$20 million from Blended Finance in the mezzanine tranche of the Acumen Hardest to Reach Fund (the H2R Fund, the Fund, or the Project). The H2R Fund targets a US$200 million strategy, structured into three US$60 million equity tranches—junior, mezzanine, and senior—alongside a US$20 million grant facility dedicated to impact-based interest rate reductions for borrowers, linked to KPIs such as the number of first-time electricity users reached.

The Fund aims to support off-grid solar (OGS) companies in 16 countries in Sub-Saharan Africa (SSA) with the lowest electrification rates and the highest poverty levels by providing financing to a mix of international and local companies that distribute and finance off-grid solar home systems, in particular those following the Pay-as-you-Go (PayGo) business model.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	45.0

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Fund	Short/Medium Term Loans to Corporates
Fund	Short/Medium Term Loans to Corporates

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

Project outcome: The project will increase access to affordable energy by providing much-needed funding to companies distributing and financing off-grid solar products, targeting the hardest-to-reach countries in Africa where there is limited availability of these products, and the environmental effects related to the use of solar home systems. This will extend affordable electricity to populations currently lacking reliable access, including low-income populations and rural segments in climate-vulnerable regions, and will contribute to the SDGs. Contribution to market creation: The project aims to improve the inclusiveness of the off-grid solar market in the target countries, by improving the availability of financing to companies to target the hardest to reach segments in the more nascent markets. Additionally, the fund’s use of technical assistance, and impact indexing is expected to serve as a model for other funds seeking to drive higher impact via demonstration and replication channels.

IFC's additionality through the Project is primarily through financing structure. IFC will provide longer-term financing of up to ten years through the Project, allowing the Fund a tenor of funding that is not readily available in the market from commercial sources; furthermore the innovative structure of the Fund is enabled by the participation of IFC which is critical for crowding in capital into the Fund, and by bringing IFC’s investment expertise to bear and sharing knowledge on structuring and managing the Fund.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
Net GHG Emissions	ton CO2e per year		Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

The Project entails an investment of up to US$45 million in the Fund to support off-grid solar companies in 16 countries in Sub-Saharan Africa with the lowest electrification rates and highest poverty levels. primarily focuses on vertically integrated solar home system (SHS) companies, last mile distributors of SHS companies, and accounts receivables financing vehicles, while micro-grids and mini-grids are expected to receive a smaller share of the fund’s financing. The expected E&S risks and impacts of the Project are considered medium. As such, the Project has been categorized as Category FI-2 in accordance with IFC's Sustainability Policy. The Project will not support coal-related activities or higher-risk business activities that may include a) involuntary resettlement, b) risk of adverse impacts on Indigenous Peoples, c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage or d) significant Occupational Health and Safety risks. The applicable E&S performance requirements for this Project include the IFC Exclusion List, relevant host country E&S laws and regulations, and the IFC Performance Standards. The key E&S risks and impacts derive from the Fund Manager's capacity to identify and manage the potential E&S risks associated with its financing activities. Typical risks and impacts include occupational health & safety, supply chain-related risks, labor and working conditions, and waste management, among others. The Fund Manager’s human resources policies are generally aligned with IFC Performance Standard 2: Labor and Working Conditions. The human resources policies will be formalized for operations in Kenya, Nigeria, and the United Kingdom.

Acumen has developed an E&S management system (ESMS) specific to the prospective transactions considered under the H2R Fund. The ESMS applies to the Fund's financing activities and is integrated into the Fund's investment cycle. The ESMS excludes consideration of Category A activities. The ESMS includes E&S risk categorization for direct investment and business activities involving investments in financial institutions or involving financial intermediation. It assigns roles and responsibilities for key actors in the E&S risk management process and provides for E&S capacity building for fund staff. The ESMS outlines the E&S risk assessment process, from screening to E&S due diligence to development of an E&S action plan (incorporated into the legal agreement), to post-investment considerations. In addition, the ESMS includes an annex of support material to aid the E&S management system implementation. The Fund Manager has designated an E&S team to support the ESMS implementation within the fund. In addition, the fund procures the services of third-party E&S consultants to support the E&S due diligence process for certain transactions. The Fund Manager has developed an external communication mechanism. The E&S management system will be enhanced by: (1) aligning the exclusion list with the IFC Exclusion List; (2) developing E&S risk management protocols for micro-grid, mini-grids, and accounts receivables financing investments; (3) developing separate policies and procedures on sustainable sourcing and managing potential forced labor risks in the solar supply chain; (4) developing occupational health and safety (OHS) guidelines for key OHS risks for SHS, micro-grid, and mini-grid companies; and (5) establishing a contextual risk assessment framework. The fund will be required to provide E&S due diligence reports for the first three prospective investments to IFC for review to support the ESMS implementation.

S.no	Title	Anticipated Completion Date
1	E&S management system enhancements	01/28/2025
2	E&S risk management training	08/18/2025
3	Enhance human resources policies	08/18/2025

Contacts

For Inquiries About the Project, Contact

Acumen Fund Inc
Jiwoo Choi
Chief of Strategic Initiatives
+1 212-566-8821
jchoi@acumen.org
40 Worth Street, Suite 303 New York, NY, 10013, USA
https://acumen.org/

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