Cote d'Ivoire - Zola Energy Cote d'Ivoire Pay-As-You-Go Solar Home Systems

The proposed project is for the Bank to help mobilize a pilot local currency senior debt funding in FCFA for the equivalent of EUR 24 million in a receivables-based financing structure to enable Zola Energy Côte d’Ivoire (ZECI) to scaleup the rollout of pay-as-you-go off-grid solar home systems (SHS) to approximately 100,000 households in rural areas of Côte d’Ivoire (CIV) by 2020. ZECI is a 50/50 Joint Venture constituted by Off-Grid Electric (OGE) and Electricité de France (EDF). ZECI’s business model, which consists of selling solar kits via 3-year leaseto-own contracts (creating predictable receivables payable with mobile money), facilitates underserved low-and middle-income customers’ access to clean electricity, and contributes to their financial inclusion (credit history building, access to finance and asset ownership). The operation complements the PRETD2 operation in Cote d’Ivoire (approved on 2 Nov 2016) to finance the power transmission and distribution networks reinforcement, by providing access to clean energy to underserved households; and the PADMAFIR project to support the development of WAEMU’s regional financial market, which seeks to modernize the regulatory framework to increase competitiveness and facilitate the deployment of new products, and to deepen the regional financial markets by building stakeholders’ capacity – notably on new products such as securitization. The Bank intervention will crowd in the commercial participation of 2 private sector banks - 1 local commercial bank, Societé Générale de Banques en Côte d’Ivoire (SGBCI); and 1 international investment bank, Credit Agricole Corporate Investment Bank (CACIB). AfDB, SGBCI and CACIB will each retain 1/3 of the risk on the FCFA senior secured debt facility of EUR 24 million equivalent. The Bank will provide a EUR 8 million Partial Credit Guarantee (PCG) covering 1/3 of the senior secured debt facility, which will catalyze the participation of: SGBCI, who will serve as the lender of record for the whole senior secured debt facility, and; CACIB, who will also provide a PCG covering 1/3 of the senior secured debt facility. The proposed transaction structure enables the Borrower to access a larger volume of debt funding, for a longer tenor, and a lower all-in cost of funding.