IFC and SIMA Launch Solar Green Bond for Small and Medium Solar Developers in Africa

IFC, a member of the World Bank Group, in partnership with Social Investment Managers and Advisors LLC (SIMA Funds or SIMA) and other financiers have reached the first close of the $150 million SIMA Commercial & Industrial Solar Green Bond, which will finance small-scale productive-use solar projects throughout Africa.

07-02-2024

IFC and SIMA Launch Solar Green Bond for Small and Medium Solar Developers in Africa

The bond would be one of the largest impact-driven funds exclusively focused on furthering the commercial and industrial solar landscape in Africa. It will offer short-term corporate financing and project financing up to 10 years to support the growth of small and medium-size local developers for individual projects less than 5MW. It will focus on the manufacturing, services, education, healthcare, and agri-processing sectors.

IFC and SIMA Launch Solar Green Bond for Small and Medium Solar Developers in Africa

Demand for solar solutions is growing rapidly, but access to affordable financing is a major bottleneck for Africa’s smaller businesses.

Sérgio Pimenta, IFC Vice President for Africa

Increasing access to clean and affordable energy in Africa is key for achieving the Sustainable Development Goals and enhancing climate resilience. The bond aims to finance over 220 MW of on-site solar energy and energy storage projects that will provide energy savings, enhance value chains, and reduce fossil fuel consumption and carbon emissions by an estimated 4 million tons over the life of the assets. Additionally, this initiative is set to support productive jobs and dedicates at least 10 percent of the fund to lower-income countries.

IFC and SIMA Launch Solar Green Bond for Small and Medium Solar Developers in Africa

C & I solar presents a great opportunity to solarize productive use sector and impactful institutions such as hospitals and educational institutions.

Vinay Bandaru, Partner, SIMA Funds

IFC’s $45 million financing package includes a $25 million IFC A loan and subordinated loans of $11 million from the Finland-IFC Blended Finance for Climate Program and $9 million from the Global Alliance for People and the Planet (GEAPP).

“Demand for solar solutions is growing rapidly, but access to affordable financing is a major bottleneck for Africa’s smaller businesses. Solar projects still have higher capital costs than less environmentally friendly technologies, leading to continued heavy reliance on fossil-fuel backup generators,” said Sérgio Pimenta, IFC Vice President for Africa. “We’re pleased to be participating in this innovative partnership to help advance sustainable energy solutions.”

Vinay Bandaru, Partner, SIMA Funds, elaborated, "C & I solar presents a great opportunity to solarize productive use sector and impactful institutions such as hospitals and educational institutions. We are not chasing deals but identifying good developers to partner with and to do multiple projects with them while also providing coordinated technical assistance to help create a sub-segment of SMA developers focused on projects of less than 5MW. This bond is unique with its ESG numeric scorecard, ensuring a clear, quantifiable impact on environment, society, and governance. Our partnership with IFC enables us to channel our innovative approach to financing to many interested developers in Africa's Least Developed Countries."

About

IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises.

For more information, visit www.ifc.org

The Finland-IFC Blended Finance for Climate Program
The Finland-IFC Blended Finance for Climate Program seeks to catalyze innovative investments and unlock private financing into climate-smart projects in low-income developing countries, creating markets and opportunities for the private sector. The Program covers multiple geographies, sectors, and business models, including investments in renewable energy (including distributed/captive energy solution), energy efficiency, green buildings, climate-smart agriculture, and forestry, among others.

SIMA Funds
Founded in 2016 by impact investment veterans Asad Mahmood and Michael Rauenhorst, Social Investment Managers and Advisors (SIMA) is an SEC-registered firm with a unique culture and business model. We have the largest number of relationships within energy companies in Africa. SIMA partners with diverse investors, crafting market-based opportunities with risk mitigation. Their focus spans solar energy, financial inclusion, and affordable housing, uplifting underserved communities.

Learn more at www.simafunds.com.


The Global Energy Alliance for People and Planet
The Global Energy Alliance for People and Planet (GEAPP) is an alliance of philanthropy, governments in emerging and developed economies, and technology, policy, and financing partners. IFC GEAPP are partnering to make strategic investments in distributed renewable energy (DRE) solutions, principally in sub-Saharan Africa. This collaboration is part of both organizations' commitment to ending energy poverty and delivering reliable, sustainable power to millions across the world.

For more information, click here.

SIMA Commercial & Industrial Solar Green Bond

  • Debt $ 10,000,000.00 (2023)
    Sub-Saharan Africa, Kenya, Nigeria, South Africa

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