More than 675 million people worldwide still lack access to electricity, with the majority living in Sub-Saharan Africa, despite the continent’s vast renewable energy potential. As solar power becomes one of the most affordable energy sources globally, distributed renewable solutions such as mini-grids, agri-solar systems, and commercial and industrial installations present a viable pathway to universal energy access. However, Africa continues to receive less than 2% of global clean energy finance, highlighting the urgent need for innovative financing approaches that can mobilize private capital at scale.
Blended finance has emerged as a critical tool to address this gap by using catalytic public and philanthropic capital to reduce investment risk and attract commercial investors. In this context, Convergence awarded a proof-of-concept grant to support the design of the Mirova Gigaton Fund, a $400 million blended finance vehicle focused on scaling distributed clean energy and climate solutions across Sub-Saharan Africa, Southeast Asia, and Latin America. Launched in 2023, the fund aims to tackle energy poverty while supporting an equitable transition to low-carbon development.
The Mirova Gigaton Fund provides long-term, flexible debt financing to small and medium-sized enterprises operating in underserved markets, addressing a key financing gap for commercially viable energy businesses. Its investment focus spans sectors such as commercial and industrial solar, solar home systems, mini-grids, telecom energy services, agri-solar, and emerging technologies including battery storage and e-mobility. The fund’s layered structure combines catalytic junior capital, senior and super-senior debt tranches, and risk-sharing mechanisms, supported by a technical assistance facility that strengthens environmental, social, and governance practices and operational capacity among investee companies.
Gender equality and climate impact are central to the fund’s strategy. The Mirova Gigaton Fund is aligned with the 2X Challenge and actively promotes gender-inclusive practices across its portfolio, supported by tailored technical assistance to help companies implement gender action plans and improve workplace equity. By combining flexible capital with targeted support, the fund has already enabled first-time energy access for millions of people, avoided significant carbon emissions, and supported tens of thousands of jobs, with women benefiting substantially from these outcomes.
The design and evolution of the fund highlight key lessons for blended finance practitioners, including the importance of simplicity, adaptability to market conditions, and the integration of complementary tools such as guarantees and technical assistance. With commitments exceeding $330 million as of early 2025, the Mirova Gigaton Fund demonstrates how well-structured catalytic capital can crowd in private investment and deliver scalable climate, energy, and gender outcomes, offering a replicable model for future climate finance initiatives in emerging and frontier markets.
