The International Financing Corporation (IFC) and Montreal-based fund manager Cordiant Capital have made loans totalling $7m to Off.Grid:Electric in Tanzania.
The purpose of the loans is to enable Dar es Salaam-based Off.Grid:Electric to expand in line with its plans to reach 200,000 Tanzanian households by the end of the year. The IFC is supplying $4.5 million of the loan, with the remaining $2.5 million coming from Cordiant Capital.
F. Xavier Helgesen, chief executive of Off.Grid:Electric, said that the IFC’s backing and expertise would help them bring affordable power to millions across the continent. He said that his company looked forward to continuing its important work with the IFC support.
Helgesen said that the terms of the loan were confidential, but commercial.
He added, Our core thesis of our company is that a large group of African rooftops with solar panels is an invest-able asset with predictable cash flows. We have proven this at a small scale in a ground-breaking way with our equity investors money, but couldnt scale that way. This is where IFC comes in. IFC took the risk as the first major debt provider for Off.Grid:Electric. They are doing the de-risking with this facility for the larger-scale project investors who will come after them.
He added, Demonstrating we can draw debt from a AAA-rated institution and pay it back with interest through reliable payments from our customers is the most important proof point we can have as a company.
The IFC said in a statement that it had provided the loan through its Cleantech Innovation Facility. That facility is a joint enterprise between the IFC and the Global Environment Facility.
The IFC has long been an investor in renewable energy across developing countries, having invested $11 billion in renewable energy and other climate-solutions over the last eleven years. The NGO is also a major investor in Jordan’s PV landscape.