(Source: European Investment Bank)
On March 21, 2018, the African Trade Insurance (ATI), the European Investment Bank (EIB) and Munich Re launched a USD 1.4 billion renewable energy facility for sub-Saharan Africa. The Africa Energy Guarantee Facility (AEGF) will provide the first dedicated reinsurance for sustainable energy projects in 25 sub-Saharan African countries.
The government of Germany and the European Union backed the AEGF as part of their commitment to backing the UN Sustainable Development Goal 7 – sustainable energy for all. The German Federal Ministry of Economic Cooperation and Development through the KfW will provide funding of up to €32.9 million to the AEGF.
The novelty of AEGF as a financial instrument consists of bringing certainty and improving commercial insurance in African energy markets where political risks have limited investors’ appetite. Through the AEGF, ATI, EIB and Munich RE expect to have a significant impact in catalyzing new sustainable energy projects in Africa. Products offered under the AEGF include insurance against sovereign or sub-sovereign non-payment under a public-private partnership, expropriation and breach of contract, currency inconvertibility, war, civil unrest and arbitration award default.
To learn more about the AEGF, read full press release here.