DFC commits US$5m loan to BIX Capital to provide debt financing to SMEs

AFRICA – U.S. International Development Finance Corporation (DFC), formerly the Overseas Private Investment Corporation (OPIC), has committed a US$5 million loan to BIX Capital.

In addition, FMO, the Dutch entrepreneurial development bank has reclassified part of its existing US$5 million commitment to mezzanine financing, showing their continued commitment to clean cooking and to BIX Capital.

The loan from DFC will be used to provide debt financing to SMEs that enable access to high-impact products such as cookstoves and water purification systems, primarily in Sub Saharan Africa. The beneficiaries will be low income households at the base of the pyramid, whose livelihoods will be significantly improved.

FMO’s commitment strengthens the capital base and allows BIX Capital to absorb additional senior debt financing from DFC. BIX Capital has a blended financing structure with a 1:2 Debt-To-Equity ratio.

The loan from DFC and the mezzanine commitment from FMO will enable BIX Capital to scale up and continue to improve livelihoods through products that support clean air, water and energy

BIX is a unique investment vehicle initiated by the Shell Foundation, Cardano Development and FOUNT.

Their mission is to provide debt financing to SMEs through an innovative result-based finance structure creating access to high impact products such as cookstoves or water purification systems for people at the Base of the Pyramid in sub-Saharan Africa.

The pre-financing they offer to these SMEs affects all the actors of the value chain (producers, distributors, retailers and consumers). When these products are used, social and environmental impacts are generated.

When these are quantified (such as tCO2 reduced) and where possible certified, they represent monetary value. BIX uses an innovative concept to monetize these impact credits.

BIX loans are based on the value of future income of impact certificates (such as carbon credits) generated by these products, which serve as a security.

The United States International Development Finance Corporation is the development finance institution of the United States federal government, primarily responsible for providing and facilitating the financing of private development projects in lower- and middle-income countries.

FMO is a Dutch development bank structured as a bilateral private-sector international financial institution based in the Hague, the Netherlands.

FMO manages funds for the Ministries of Foreign Affairs and Economic Affairs of the Dutch government to maximize the development impact of private sector investments.

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