AfDB to mobilize CFAF 15 billion to finance pay-as-you-go solar home systems in Africa

Abidjan, Côte d'Ivoire (PANA) - Because in very remote rural areas of some African countries, access to electricity for low-income people is still through traditional and outdated systems such as battery-powered flashlights or oil lamps that pollute and are extremely harmful to health, the African Development Bank (AfDB) is to help mobilize over CFAF 15 billion to finance pay-as-you-go solar home systems

In response to this urgent need, the Board of Directors of the AfDB has approved a proposal to help Zola EDF Côte d'Ivoire (ZECI), to mobilize a loan in local currency to the tune of CFAF 15.75 billion (approximately 24 million euros) arranged by Société Générale de Banque in Côte d'Ivoire (SGBCI) and Crédit Agricole Corporate and Investment Bank (Crédit Agricole CIB).

According to the AfDB media channel, the Bank will provide a partial credit guarantee covering part of the guaranteed loan facility as a catalyst.

NEoT CI, the special purpose vehicle currently being created to mobilize the receivables-backed senior loan is sponsored by NEoT Offgrid Africa (NOA), an investment platform focused on distributed energy in Africa, managed by NEoT Capital, with Meridiam and EDF as investors.

In addition, the Grameen Crédit Agricole Foundation will participate in the financing of ZECI and will monitor environmental and social norms for the duration of the transaction.

The project will pilot a local currency receivables-backed financing structure to allow ZECI - a 50/50 joint venture between Off-Grid Electric (OGE) and EDF - to provide access to approximately 100,000 rural households with pay-as-you-go solar home systems by 2020.

This operation would be the first large-scale local currency financing structure using the securitization technique for the off-grid renewable energy sector in Africa.

ZECI's business model, which consists of selling solar kits that meet international quality standards, under lease-purchase agreements for a three-year period (creation of predictable receivables payable with mobile money), makes it easier for low-income customers to access clean energy.

In addition, it enables financial inclusion, including through the establishment of credit history, as well as access to financing and ownership of assets.

Presenting the project, the Bank’s Renewable Energy and Financial Sector Development directors –  Ousseynou Nakoulima and Stefan Nalletamby, respectively,  emphasized the viability of the operation, its alignment with the Bank's High 5s, namely "Light up and power Africa "(New Deal on Energy for Africa, especially reaching the target of 75 million households by 2025)," Improving the quality of life for the people of  Africa” and the Flagship Industrialization Strategy, which aims to "create liquid and efficient capital markets", by supporting the development of innovative new financing mechanisms.

Furthermore,  Amadou Hott, the Bank’s Vice President in charge of Energy, noted that "the financing is in line with the 2016-20 National Development Plan of Côte d’Ivoire, the Strategic Plan for the Energy Sector and the Electricity for All program initiated by Ivorian authorities to electrify all localities by 2020."

Board members underscored the relevance of the support, which will complement the Transmission and Distribution Network Strengthening Project (PRETD) in Côte d'Ivoire (approved on 2 November 2016) to fund electricity transmission and distribution networks, ensuring access to clean energy for underserved households.

The provision of clean electricity under the project will have considerable impact on many low-income households in rural areas. It will also improve health outcomes by helping to reduce harmful kerosene lamps. It will improve the socio-economic situation of the target population, especially women.

Through the use of mobile payment systems, the project will promote financial inclusion of rural populations. The project also contributes to the development of the financial sector by piloting a receivables-backed financing structure.
-0- PANA VAO 16June2018

16 june 2018 04:56:37




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