Cordiant Capital lends $2.5 mln to Tanzania’s Off Grid Electric

International Finance Corp (IFC), a member of the World Bank Group, has provided funding to Off Grid Electric, a Tanzanian solar leasing company. The IFC Cleantech Innovation Facility committed a US$4.5 million loan to the company. In addition, Cordiant Capital, a Canadian private equity and debt investor in emerging markets, committed a US$2.5 million loan. Off Grid Electric is a provider of home solar electric systems to consumers in rural and urban Tanzania. It plans to reach 200,000 households in the country by 2015.

PRESS RELEASE

IFC Announces Financing Package to Expand Reach of Tanzania’s Off Grid Electric

In Nairobi
Neha Sud
Phone: +254-20-293-7403
Email: nsud@ifc.org

In Washington D.C.
Laura MacInnis
Phone: + 1 202 458 8165
Email:lmacinnis@ifc.org

Dar es Salaam, Tanzania, 02 February 2015 — IFC, a member of the World Bank Group, today announced new financing to help expand the reach of Off Grid Electric, a solar leasing company in Tanzania. Off Grid Electric provides home solar electric systems to consumers in rural and urban Tanzania, which can be operated via mobile phone. The company’s expansion plan aims to reach 200,000 households in Tanzania by the end of 2015.

The new facility consists of a $4.5 million loan provided through the IFC Cleantech Innovation Facility and an additional $2.5 million loan from Cordiant Capital of Montreal, Canada. Launched in 2012, the Cleantech Innovation Facility promotes green innovation and transfer of clean technologies to developing countries. Investments target companies that offer products or services to mitigate carbon emissions. The facility is jointly funded by IFC and the Global Environment Facility. The Global Environment Facility is a partnership where 183 countries work with international institutions, civil society and the private sector to address global environmental issues.

“IFC’s backing and expertise will help us bring affordable power to millions of people across Africa,” said Xavier Helgesen, Off Grid Electric’s CEO, “We look forward to continuing this important work IFC’s support.”

Off Grid Electric is unique in allowing customers to make payments in small increments, building ownership and credit history while lighting their homes as soon as service is established. For a $6-10 installation fee, the company provides customers with a solar home system that includes panels, lithium batteries, lights, and a meter. To use the system, customers send a mobile payment and receive a passcode via text message to unlock their energy. The company has distributed nearly 35,000 solar home systems in the Arusha, Kilimanjaro and Mwanza regions.

The need for renewable energy is urgent in Tanzania, where each year, low-income households spend over $900 million to meet their lighting, cooking and mobile charging needs. Many use kerosene to fuel their lamps and back-up generators. Solar energy offers a cleaner, longer-lasting alternative to kerosene fuels, which contribute heavily to greenhouse gases. Off Grid Electric offers a low cost model for households looking to switch from kerosene to solar, reducing the upfront cost to customers and minimizing the risks associated with maintenance and repair. Families can opt to top up their solar systems in small increments, in line with their finances.

Oumar Seydi, IFC Director for Eastern and Southern Africa said, “As developing countries move to a greener, low-carbon growth paths, the private sector will play a critical role in expanding access to energy. IFC supports as the innovation of Off Grid Electric, which provides low-cost, clean energy solutions to the millions of people in Africa not connected to the grid.”

Promoting access to clean energy is a priority for IFC. Over the past eight years, IFC has invested $11 billion in renewable energy and other climate-smart solutions in developing countries.

About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in about 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity. In FY14, we provided more than $22 billion in financing to improve lives in developing countries and tackle the most urgent challenges of development. For more information, visit www.ifc.org

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About Off Grid Electric
Off Grid Electric provides pre-paid solar energy via mobile money – “solar as a service” – that makes an aspirational modern energy lifestyle accessible and affordable. The company designs, manufactures, installs and maintains solar home systems that provide modern electrical services to households that do not have access to electricity. Service levels start below the cost of kerosene and grow with household needs with customers paying as little as a day at a time. The company is based in Arusha, Tanzania. For more information, visit www.offgrid-electric.com

About the Global Environment Facility
The Global Environment Facility (GEF) is a partnership for international cooperation where 183 countries work together with international institutions, civil society organizations and the private sector, to address global environmental issues. The GEF serves as financial mechanism for the United Nations Framework Convention on Climate Change, the Convention on Biological Diversity, the United Nations Convention to Combat Desertification, the Stockholm Convention on Persistent Organic Pollutants and the Minamata Convention on Mercury. It also works closely with the Montreal Protocol on Ozone Depleting Substances. Since 1991, the GEF has provided $12.5 billion in grants and leveraged $58 billion in co-financing for 3,690 projects in 165 developing countries to support activities related to biodiversity, climate change, international waters, land degradation, and chemicals and waste in the context of development projects and programs. For more information, visit www.thegef.org

Photo courtesy of Off Grid Electric