Green Guarantee Company (GGC) has completed its first two transactions, mobilizing US$70 million to support renewable energy projects under Africa’s Mission 300 electrification initiative, as efforts intensify to expand electricity access across the continent.
The financing will support mini-grid developments in Nigeria and off-grid solar projects across sub-Saharan Africa, helping extend electricity access to millions of people while demonstrating how risk-sharing mechanisms can attract private investment into renewable energy projects.
GGC, which describes itself as the world’s first guarantor dedicated to climate finance in emerging markets, announced the completion of the transactions on Tuesday. The company, headquartered in London, launched operations on the London Stock Exchange in February 2024.
Unlike traditional financial institutions that provide loans directly, GGC offers guarantees that reduce investment risks for lenders and investors, allowing projects considered too risky to access international capital.
The first transaction involves a US$20 million framework guarantee provided to Bank of Africa UK to support the development of mini-grid power systems in Nigeria under the DARES programme, implemented in partnership with the Nigerian government and its Rural Electrification Agency.
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The project is expected to provide new or improved electricity access to around 340,000 people and add 13 megawatts of renewable energy capacity. It is also projected to prevent approximately 250,000 tonnes of carbon dioxide emissions annually.
Said Adren, chief executive of Bank of Africa UK, said the agreement reflects the bank’s commitment to helping attract international capital into Africa’s energy transition.
The second transaction involves a larger US$50 million guarantee supporting a green bond issued by a special purpose vehicle and listed on the London Stock Exchange.
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The proceeds from the bond will finance securitisation vehicles established by African Frontier Capital (AFC), which convert future payments from solar home systems into investment assets that can be purchased by investors.
The model allows receivables from pay-as-you-go solar systems to be packaged into securities, creating a new financing channel for decentralized renewable energy projects.
The green bond, arranged by Standard Chartered, attracted institutional investors from the United Kingdom and the United States, including insurer Legal & General and impact investor Calvert Impact Capital.
The transaction is expected to expand electricity access to about 4.3 million people across sub-Saharan Africa.
African Frontier Capital chief executive Eric De Moudt said the deal demonstrates how private capital can be deployed at scale to support renewable energy solutions in African markets.
AFC has acquired more than $400 million worth of off-grid solar assets across Kenya, Tanzania, Nigeria and Uganda, according to the company.
The announcement comes as Mission 300, launched in April 2024 by the World Bank and African Development Bank, moves toward its target of connecting 300 million Africans to electricity by 2030.
The African Development Bank estimates that more than 50 million people have already gained electricity access across 40 African countries, but nearly 600 million people on the continent still lack reliable power.
GGC’s guarantee model is designed to address one of the biggest challenges facing renewable energy investment in Africa: perceived risk.
The company currently has a guarantee capacity of US$1 billion and is supported by institutions including the Green Climate Fund, the UK government, Germany’s development bank KfW, the Nigeria Sovereign Investment Authority and Norway’s Norfund.
GGC, which holds a BBB rating from Fitch Ratings, plans to expand its guarantee capacity to $5 billion by 2035.
The company said the initial transactions could serve as a model for scaling renewable energy investment across Africa, although the success of expanding the approach into new markets will depend on investor confidence and continued policy support.
