The Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, and the Calvert Foundation Wednesday signed financing agreements to expand the lending operations of Pamiga Finance S.A. (PFSA), an impact investment company of the Participatory Microfinance Group for Africa (PAMIGA).
PAMIGA for over a decade has been supporting access to finance for poor individuals, households, small farms and businesses in rural sub-Saharan Africa through its network of microfinance institutions.
OPIC’s $4.75 million senior debt joins $1.5 million from the Calvert Foundation which will help form a new $12 million PFSA investment facility that is projected to issue nearly 100,000 microloans over seven years in Benin, Burkina Faso, Cameroon, Kenya, Madagascar, Senegal, Tanzania, and Togo.
Specifically, PFSA’s efforts will enable access to reliable power and water for businesses and farms by financing off-grid solar electricity kits and micro-irrigation systems. The establishment of this single lending portfolio is projected to directly improve the lives of 582,000 Africans.
“Financing access to solar energy for the poor in rural Africa has a huge social impact: more kids can study at night and in safer conditions; people can charge their mobile phones to trade, send money, and communicate; public premises such as markets, dispensaries, and schools get light and refrigeration. Small entrepreneurs no longer depend upon rising oil prices to use their machinery. Financing access to irrigation water enables the sub-Saharan farmers to no longer depend upon the rain season and climate hazards. They can grow all year round and improve their livelihood and food security whilst monitoring their footprint on the environment,” said PFSA Chief Investment Officer Mathieu Merceret.
“PAMIGA is a partner whose work is proven and whose lending network is expansive. OPIC’s targeted support to PAMIGA will have an outsized effect in empowering nearly 100,000 small businesses and farms across eight African countries with the irrigation and renewable energy needed to make their operations sustainable,” said Elizabeth Littlefield, OPIC’s President and CEO. “This investment is also a terrific example of OPIC’s ability to advance some of the most impactful private sector projects in the world. As the first project to emerge from OPIC’s Portfolio for Impact pilot program, PAMIGA is proof that a small group of focused visionaries can make a big difference with the right support.”
OPIC’s financing represents two important milestones for the Agency. PFSA initially received a small amount of early-stage capital from the African Clean Energy Finance (ACEF) initiative, with U.S. State Department funding administered by OPIC. Proving the catalytic model of this program, PFSA is the first ACEF-supported project to subsequently receive OPIC project financing.
Further financial support for the establishment of the PFSA lending facility came from the Swiss Agency for Development & Cooperation and the European Investment Bank.
PFSA works with 16 microfinance institutions member of PAMIGA network in 10 sub-Saharan countries.