African solar developer REDAVIA announced that it received €1.5 million ($1.73 million) as its first catalyst loan from Energy and Environment Partnership Trust Fund (EEP Africa).

REVADIA develops solar projects for businesses and communities in East and West Africa. It also provides solar power leasing models for its commercial & industrial (C&I) and small and medium scale enterprises (SME) in Kenya and Ghana. The investment would enable further expansion of REDAVIA’s solar power leasing model. Solar leasing is third-party based financing and operating model for solar systems which does not involve upfront payments.

The loan will also help the company set up 1.26 MW of solar projects in the region and generate employment opportunities. These projects are expected to generate 1,700 MWh of solar energy and mitigate 730 tons of carbon emissions annually, the company said in a press statement.

EEP Catalyst has been designed to finance renewable market leaders in Africa. In Africa’s renewable sector, flexible early-stage debt is still scarce, and expansion stage loans are needed to support innovation and unlock commercial capital. EEP Catalyst is an evolution of the EEP Africa platform that builds on a portfolio of nearly 250 early-stage clean energy companies to enable scale-up of commercially viable renewable solutions. Nordic Development Fund (NDF) launched the EEP Catalyst window in 2019 as a pilot to provide follow-on debt financing to successful companies from the EEP Innovation grant portfolio.

“This crucial funding enables REDAVIA to continue to support companies in Ghana and Kenya with affordable, clean power, so these businesses build local wealth and increase employment sustainably,” said Erwin Spolders, CEO of REDAVIA.

According to Mercom India Research, last year, REDAVIA signed a $2 million debt financing agreement with ElectriFI, an impact investment facility with investors from European Commission and Power Africa. The fund was provided for REDAVIA’s expansion in Ghana’s industrial and commercial sectors.