The GLPGP has designed two funds to accelerate LPG sector expansions beyond what local actors are able to mobilize alone:
- LPG Infrastructure and Distribution Fund ("LID" Fund)
- LPG First Costs Financing Fund ("FCF" Fund)
The two funds are designed to operate in a coordinated manner, mediating market-rate capital and blended capital.
LPG Infrastructure and Distribution Fund ("LID" Fund)
The LID Fund will build, own or co-own, operate as needed and transfer (BOOT) necessary large-scale LPG infrastructure that neither the public sector nor private sector in developing countries has been able to build alone, and that the international private sector has not been willing to build alone.
The LID Fund is designed to invest in the LPG importing, storage, transportation and distribution infrastructure. With downstream consumer purchase uncertainty removed by the FCF Fund, that infrastructure will scale up national LPG supply and distribution capability, generating economies of scale and delivering a market-rate return.
Through such investments, economies of scale in LPG sourcing and distribution will be created in proportion to the LPG demand that is, in turn, unlocked through downstream consumer finance and education. The LID Fund will mediate capital from institutional investors, development finance institutions (DFIs) and other strategic and impact investor groups. It will provide financing to legitimate local projects and companies (both private and state-owned) in a competition-neutral way for expanded LPG sourcing, storage, filling, transport, distribution, manufacturing and related activities within the GLPGP focus countries.
LPG First Costs Financing Fund ("FCF" Fund)
The FCF Fund will unlock consumer demand for LPG through financial support for consumer acquisition of LPG equipment. It will support qualified local microfinance institutions (MFIs) and other qualified local consumer credit intermediaries to on-lend to LPG consumers and to facilitate local SME business expansions that support LPG market growth.
The FCF Fund is designed to be a concessional-rate revolving consumer and SME financing fund, mediating blended capital from donors, foundations and investor groups. It will distribute capital through local partners including microfinance institutions (MFIs), credit unions, consumer and employee cooperatives, local banks, and other qualified intermediaries. Its purpose is to unlock consumer demand for LPG by mitigating the high up-front consumer costs for LPG equipment and the high working capital requirements for SMEs to expand distribution and retailing of LPG equipment and fuel.
Together with donor support for broad consumer education and awareness campaigns combined with culture-appropriate stove design and distribution systems, the FCF Fund will drive significant uptake and adoption of LPG in the GLPGP focus countries. The FCF Fund will also encourage innovation and entrepreneurship along the middle and the consumer end of the supply chain in order to build sustainable last-kilometer delivery systems to end-users.
Funding Requests to GLPGP
The LID and FCF funds are expected to be launched during 2018. GLPGP does not presently accept uninvited requests to consider future funding for companies or projects. Funding mobilized and mediated by GLPGP will be invested and/or loaned, on a competition-neutral basis, in accordance with the agreed national LPG investment and intervention plans of GLPGP focus countries. For each focus country, details of such plans and associated funding opportunities for third parties will be posted in a special section of this web site.
The above fund descriptions are presented for informational purposes only and do not constitute an offer to sell or a solicitation of an offer to buy securities.