Across the world, more than 675 million people still live without access to electricity, the vast majority in Sub-Saharan Africa. Yet the continent’s energy potential is immense. With solar energy now ranking among the most affordable power sources globally, distributed renewable systems,(e.g., mini-grids, agri-solar, and commercial and industrial (C&I) installations) offer a scalable path toward universal energy access.
However, mobilizing investment at scale remains a major hurdle, as Africa currently receives under 2% of global clean energy finance. Bridging this gap requires innovative mechanisms that can attract commercial capital into high-impact sectors. This is where blended finance can make a difference, by using catalytic public and philanthropic capital to de-risk investments and crowd in private capital for sustainable, inclusive growth.
Proof of Concept Grant for the Mirova Gigaton Fund
Convergence awarded a proof of concept grant to Mirova under the Gender-Responsive Climate Finance Window funded by Global Affairs Canada (GAC), for the design of the Mirova Gigaton Fund (MGF), a $400 million blended finance vehicle designed to scale high-impact distributed energy and climate investments in Sub-Saharan Africa, South East Asia, and Latin America. The Fund’s goal is to address energy poverty and advance an equitable, low-carbon world powered by clean energy.
MGF provides long-term, flexible debt, typically averaging $10 million per investment, to small and medium-sized enterprises (SMEs) across the Global South, bridging a critical financing gap for companies operating in underserved markets. The Fund targets commercially viable models across six key sectors: Commercial and Industrial (C&I) solar, solar home systems, telecom energy services, mini-grids, agri-solar, and emerging technologies such as e-mobility and battery storage.
The Fund’s blended structure layers junior equity and senior debt plus a super-senior tranche designed for institutional investors, complemented by a partial portfolio guarantee from the Swedish International Development Cooperation Agency (SIDA).
To enhance both financial and developmental outcomes, the Fund is supported by a Technical Assistance (TA) Facility that helps portfolio companies strengthen ESG practices, improve gender inclusivity, and build operational capacity.
Climate and Gender Lens
Climate and gender impact are embedded at the core of MGF’s mission.
Mirova has positioned MGF as a leading gender-lens investing vehicle. The Fund is officially 2X Challenge-qualified, meeting both the direct criteria (i.e.,entrepreneurship, leadership, consumption, and employment) and the indirect criteria for financial intermediaries. Approximately 50% of MGF’s portfolio is targeted toward 2X-aligned investees, with the remainder supported through the Fund’s TA Facility to achieve gender alignment.
This TA Facility provides hands-on support for investees seeking to implement gender action plans, improve workplace equality, and strengthen gender performance. By helping investees institutionalize gender equity, MGF not only advances inclusion but also drives stronger business results.
Finally, by making flexible, long-term capital available to SMEs, MGF advances climate mitigation outcomes while improving livelihoods. Since its launch in 2023, the Fund has enabled first-time energy access for approximately 4.6 million people, half of them women, while avoiding 8 million tons of CO₂ emissions and supporting around 60,000 jobs across its portfolio.
Takeaways from the Design Process
Like other practitioners developing blended finance instruments, Mirova’s design process for MGF was complex and iterative. Their experience offers valuable lessons for practitioners on a similar journey, many of which are captured in the case study co-published by Mirova and Convergence. Reflecting on MGF’s design process, there are at least 2 takeaways for practitioners going through a similar design journey as Mirova.
First, building agility into the vehicle structure while prioritizing simplicity and relevance to market context is crucial for long term success. Within the Convergence’s Blended Finance Accelerator programs, we sometimes find practitioners trying to develop very complicated vehicle structures. The best practices we have seen over time, and shown by Mirova’s case, is that blended structures work best when they are simple enough for relevant stakeholders to understand and also address the requirements of various investor groups.
In Mirova’s case, the team designed a three layered structure - a simple modification of the basic two layer structure - with super senior debt (targeting private investors such as pension funds, family offices and insurers), senior debt (a mezzanine layer tailored to meet the needs of DFIs), and a catalytic junior layer (to pool capital from development agencies and foundations that play a catalytic role in absorbing initial losses). This was done to simplify the design and to meet the expectations of different stakeholder groups.
Also, Mirova’s initial design included a fixed interest rate based on the market trends in 2021 when the Fund was initially designed. Starting late 2021 through 2022 and 2023, interest rates began to rise. In response to the evolving interest rate environment, MGF explored options of floating interest rates or updating conditions offered to private investors. Since the market at the time was not comfortable with a floating interest rate design, MGF settled on offering higher interest rates to the two senior tranches without altering the fund structure.
Second, where possible, complementing the vehicle structure with innovative elements strengthens the overall vehicle structure and builds interest for the vehicle in the ecosystem. In Mirova’s case, they chose to pursue a combination of innovative financing mechanisms such as a credit rating for the senior most tranche (though it did not materialize as intended for reasons outlined in the case study), innovative risk sharing agreements such as a partial portfolio guarantee, and customized technical assistance via their TA Facility. These elements together make the MGF’s structure unique, while improving acceptance of the vehicle among various stakeholders.
The grant from Convergence was instrumental for Mirova to continue scoping and refining the vehicle structure. In addition to refining fund design, Convergence's support to the MGF also helped them finetune their TA facility design, enabling them to better integrate a gender lens into the Fund’s strategy and marketing.
The Way Forward
The Mirova Gigaton Fund reached its third close in January 2025, with total commitments exceeding $330 million, a substantial share of which came from private investors. MGF is now firmly in its deployment and management phase, focusing on supporting the sustainable growth of its investee companies across Sub-Saharan Africa, South-East Asia, and Latin America.
MGF’s case exemplifies how a blended finance vehicle can be designed to accelerate clean energy transition in frontier and emerging markets. Ultimately, it shows that well-structured catalytic capital can crowd in commercial investment at scale, channeling much-needed financing into high-impact sectors otherwise left underfunded.
As the Fund continues to deploy capital and gender-focused TA support, it offers a blueprint for future climate finance vehicles seeking to combine financial returns, inclusion, and impact.
