IFC, SIMA launch $150m Green Bond for African solar developers
TLDR
- IFC and SIMA Funds close a $150 million solar green bond to finance productive-use solar projects in Africa, with a focus on small and medium-sized enterprises (SMEs).
- The bond supports one of the largest impact-driven funds for advancing the rooftop solar sector in Africa.
- Funding will provide corporate and project financing for up to 10 years, facilitating the expansion of local developers targeting sectors like manufacturing, services, education, healthcare, and agri-processing.
IFC, in collaboration with Social Investment Managers and Advisors LLC (SIMA Funds or SIMA) and other financiers, has reached the first close of a $150 million solar green bond. This bond aims to finance productive-use solar projects across Africa.
The bond will support one of the largest impact-driven funds dedicated to advancing the rooftop solar sector in Africa, with a particular focus on small and medium-sized enterprises (SMEs), which are typically more challenging to reach.
It will provide short-term corporate financing as well as project financing for up to 10 years to facilitate the expansion of small and medium-sized local developers. These developers will focus on individual projects with a capacity of less than 5 megawatts (MW), targeting sectors such as manufacturing, services, education, healthcare, and agri-processing.
Key Takeaways
Increasing access to clean, reliable, and affordable energy in Africa is key for achieving the Sustainable Development Goals and enhancing climate resilience. This is the first investment under the IFC and Global Energy Alliance for People and Planet (GEAPP) partnership to make strategic investments in distributed renewable energy (DRE) solutions, principally in sub-Saharan Africa.
IFC's $45 million financing package for the solar green bond includes a $25 million IFC own-account loan and subordinated loans of $11 million from the Finland-IFC Blended Finance for Climate Program and $9 million from GEAPP.
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