French firm NEoT Offgrid Africa (NOA) has closed a receivables securitisation programme with Zola Electricity Côte d’Ivoire (ZECI), which aims to equip more than 100,000 households with solar home systems in Côte d’Ivoire, mainly in rural and peri-urban areas.
ZECI is a joint venture between EDF and Zola Electric NOA, majority-owned by Meridiam, and is the first investment platform to set up a receivables securitisation programme in the financing of off-grid energy projects in Africa. Its objective for this deal is to reach a portfolio worth 40 million euros.
Through this innovative financing mechanism, NOA enables ZECI to focus on the commercialisation and deployment of clean energy supply solutions in remote areas.
With its securitisation programme, NOA bears financial risks related to the “rent-to-own” scheme whereby customers can become owners of the solar kits at the end of the rental period. In order to reach a mostly unbanked population, payments are made via a mobile money platform.
NOA is leading the financial structuring of the entire project.
As part of this operation, NOA has mandated Crédit Agricole CIB (CACIB), Société Générale CIB and Société Générale Côte d’Ivoire (SGCI) to arrange the financing, whereby SGCI has extended a loan in local currency (XOF) whose committed amounts will vary monthly depending on the characteristics of the client portfolio.
The loan is guaranteed by the African Development Bank (AfDB) and CACIB, while the Grameen Crédit Agricole Foundation will be in charge of monitoring the social and environmental performance of the project.
Solar energy is particularly suited to the African continent, being able to operate outside the transmission and distribution grids, thus making it possible to supply isolated households as well as entire cities.
In its study, The Grid won’t connect Africa but solar can, the consulting firm Kleos Advisory estimates that nearly 120 million households (approx. 600 million people) on the African continent do not have access to energy. With each household spending an average of $200 per year on energy services, the market for companies offering off-grid solar solutions for individuals is estimated at $24 billion.
“NEoT Offgrid Africa is really proud to have set up this first of a kind innovative financing scheme,” stated Philippe Ringenbach, managing director of NEoT Capital. “Financing needs for energy access in Africa are huge, but most of the times very challenging for private investors.
This deal will surely position NOA as a key player for financing SHS and other off-grid solutions (such as mini-grids and C&I installations), enabling to provide much more energy access to people and industries in Africa.”
“We are delivering sustainable and resilient infrastructures and especially supporting energy transition and access to energy in Africa, as illustrated by the 15 projects we are developing, financing and managing on the continent, added Mathieu Peller, Meridiam COO Africa. With this project, led by NOA, we are contributing to the emergence of alternative financing methods and innovative solutions in the African energy sector, where demand, particularly in the off-grid sector, is very high.”
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