Catalytic Investment

Catalytic Investments

African Water Facility will deploy small but catalytic investments, or seed funding, that will enable project owners to implement their projects. As part of co-financing arrangements, support will primarily be provided to projects that:

• Replicate or pilot innovative or alternative business models and technologies, whether through the public sector or commercialization
• Mobilise private sector financing but that need some Viability Gap Funding

Projects expected to be financed include basic water and sanitation services, irrigation schemes that benefit smallholder (often women and the youth) farmers, and small-scale hydropower.

African Water Facility will focus its Catalytic Investments on projects with the greatest opportunities for impact on the ground in terms of number of beneficiaries and funding leveraged. African Water Facility will invest in projects where its funding provides the critical impetus for the project to happen and/or where the participation of the Facility’s concessional funds allows private players to increase their financing to the project.

The African Water Facility will provide small but catalytic investments,that depending on circumstance may be reimbursable, for the following:

• Replicating and piloting innovative solutions
• Viability Gap Funding

Catalytic Investments complement the Project Preparation and Investment Promotion activities by providing limited but strategically utilised investments at the late stage development phases. In order to ensure leverage, African Water Facility will only finance alongside other investors, and will not finance more than 33% of the project cost. The leverage factor (African Water Facility investment compared to total project investment) will be used as a selection criterion.