PENDING CONTRACTING: the investment proposal has received final approval and now is entering into the contracting phase. The information as disclosed is thus indicative and provides a basis for general informational purposes only. It should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing, prior to final decision. This proposed investment is online for 30 days. In case of questions, please contact us at firstname.lastname@example.org
Investment name: NextGen Solawazi
Publication date: 23 June 2021
Sector: Solar PV
Total ElectriFI Financing: USD 2.1m (EUR 1.7m)
Environmental and Social Category: B+
(A) high risk, (B+) medium high risk, (B) medium risk or (C) low risk
NextGen is focused on building and operating several large scale solar PV power plants connected to mini- and main grids in remote and rural Tanzania and neighbouring countries. The senior debt to its first Tanzanian operational company NextGen Solawazi will finance the last phase construction and commissioning of a 5 MW ground-mounted solar PV plant connected to the isolated grid in Kigoma, in Tanzania.
The objective is to finance the construction of a 5 MW solar power plant that will be generating annual electric output of 7,500MWh. The project can as a result provide sufficient power to improve 60,113 existing and new connections of TANESCO based on average consumption levels. Similarly, calculated as replacement for the grid, 3,886 tons CO2 emissions are annually saved. This investment follows the development finance loan provided by EDFIMC in 2017 to finance the demand- and grid connection study.
Why ElectriFI wants to fund this project:
The project is the country’s first Solar IPP delivering to an isolated mini-grid, i.e. being integrated with a grid previously exclusively served by diesel generators. The replacement of diesel-based generation capacity by PV has a great positive impact not only on the environment but also on the cost price to TANESCO, who owns and operates the grid. Lowering the cost price for generation for such isolated grids will free up budget to expand the distribution network to more remote areas and users.
Environmental and Social Rationale:
The E&S risk category of the transaction has been classified as B+.
The main E&S impacts and risks relate mainly to labour conditions and safety during construction and to a lesser extent during operations. Cosntruction phase is complete. The transaction will be managed in accordance with IFC Performance Standard 1,2,3, 4, 5 and 6. Performance Standards 7 and 8 are not triggered. Gap analysis were performed against the IFC PS framework and additional supplementary checks will be done during the operation phase.