In response to low electrification rates in some remote areas across Africa, the African Development Bank ,AfDB has approved a proposal to help Zola EDF Côte d’Ivoire (ZECI), to mobilize a loan in local currency to the tune of US $28 m.
The loan has been arranged by Société Générale de Banque in Côte d’Ivoire ,SGBCI and Crédit Agricole Corporate and Investment Bank ,Crédit Agricole CIB and the AfDB will provide a partial credit guarantee covering part of the guaranteed loan facility as a catalyst.
Additionally, 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.
Local currency financing structure
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.
“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 programme initiated by Ivorian authorities to electrify all localities by 2020.”said Amadou Hott, the bank’s vice-president in charge of energy.
- Côte d’Ivoire to receive US $824m for energy grid rehabilitation project
- Rwanda to receive US $266m for electricity access program
- AfDB approves US $101m for Addis Ababa Power Project rehabilitation
- AfDB leads renewable energy financing framework in Zambia
- AfDB to invest US $12bn in Nigeria’s energy programme