BIO joins IFC and SIMA in Launching 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.

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’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."