Solarise Africa (follow-on)
- Solar PV
- Business model
Investment name: Solarise Africa
Contract signature date: July 2020
Region: Sub-Saharan Africa
Country: Kenya and South Africa
Sector: PV Solar
Total ElectriFI financing:
Series B USD 2.5m (top up on existing Series A USD 1.65m commitment from April 2019)
Environmental and Social Category: B
(A) high risk, (B+) medium high risk, (B) medium risk or (C) low risk
Solarise Africa is a young company that provides tailor-made finance or rental solutions for captive solar installations and other renewable energy and energy savings assets to selected commercial and industrial (‘C&I’) sectors (i.e. educational institutions, agri-foods processing, manufacturing, real estate, etc.) of the Kenyan and South African economies.
Funding objective: ElectriFI will invest USD 2.5m of mezzanine notes. The proceeds will be used to support the extension of the existing portfolio in South Africa and Kenya. In addition, by releasing important peak loads, the transaction will increase availability of the main grid to other (residential) off-takers. The potential growth is expected to reach 168,9 MW cumulated by 2023 and to create around 134k indirect connections to electricity. In terms of job creation, the the company aims to employ 21 staff and create 297 indirect jobs in Kenya and South Africa by 2023.
Why ElectriFI wants to fund this project:
The funds of the Series A were covering less than 12 months of active operations, and therefore the company is busy raising the second round of financing. Existing investors of which EDFIMC have been offered and requested to join the mezzanine finance tranche, to act as a sign of faith for new investors coming in. On top of that, we see good progress on the ground of Solarise footprint and we are willing to support their efforts to continue their expansion in the C&I sector. ElectriFI is supportive of Solarise business model as it supplements or replaces weak grids, but also helps reduce reliance on diesel fuel. This supports efforts to contribute to carbon avoidance (estimated at 840 tCO2/MW installed/year) and savings (at current diesel pricing, annual savings could reach approximately USD 150k/MWh). while bringing high-quality, stable, low cost, clean energy to C&I customers.
Environmental and social rationale:
Business activities come with potential limited adverse risks associated with waste management, health & safety and labour conditions. The company has developed and is implementing an Environmental and Social management system as per the IFC Sustainability framework.
IFC Performance Standards 1 to 3 are triggered.