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This is the IFC and Global Energy Alliance for People and Planet’s (GEAPP) first strategic investment in distributed renewable energy (DRE) solutions The International Finance Corporation (IFC) and the Social Investment Managers and Advisors LLC (SIMA) have launched a $150 million solar green bond for African solar developers, alongside Finland and GEAPP. The bond will support one of Africa’s largest impact-driven funds dedicated solely to growing the rooftop solar sector, with a focus on small and medium-sized firms that are more difficult to reach. The IFC says this bond will offer short-term corporate finance and project financing for up to ten years to help small and medium-sized local developers grow for individual projects under 5 megawatts (MW), with an emphasis on manufacturing, services, education, healthcare and agri-processing. This is the IFC and Global Energy Alliance for People and Planet’s (GEAPP) first strategic investment in distributed renewable energy (DRE) solutions, primarily in Sub-Saharan Africa. The IFC’s $45 million financing package for the solar green bond includes a $25 million IFC own-account loan, as well as $11 million in subordinated loans from the Finland-IFC Blended Finance for Climate Programme and $9 million from GEAPP. The solar green bond to finance more than 220MW of on-site solar energy and energy storage projects in Africa IFC said the bond is meant to finance more than 220MW of on-site solar energy and energy storage projects, which will save energy, improve value chains and cut fossil fuel consumption and carbon emissions by an estimated 4 million tonnes throughout the assets’ lifetime. Sérgio Pimenta, Regional Vice President for Africa, IFC, said they are happy to be involved in this innovative partnership to help advance sustainable energy solutions. “Although demand for solar solutions is growing rapidly, access to affordable financing is a major bottleneck for Africa’s smaller businesses. “Solar projects still have higher capital costs than alternative polluting technologies, leading to continued heavy reliance on fossil-fuel backup generators,” he said. Vinay Bandaru, Partner, SIMA Funds, elaborated: “C&I solar presents a great opportunity to solarise the productive use sector and impactful institutions such as hospitals and educational institutions. “We are not chasing deals but identifying good developers to partner with and to do multiple projects with them while also providing coordinated technical assistance to help create a sub-segment of SMA developers focused on projects less than 5MW. “ He added that the bond is unique with its ESG numeric scorecard, ensuring a clear, quantifiable impact on the environment, society and governance. “Our partnership with IFC enables us to channel our innovative approach to financing to many interested developers in Africa’s least developed countries,” said Bandaru. About SIMA Funds Social Investment Managers and Advisors (SIMA) is an SEC-registered firm with a unique culture and business model. They partner with diverse investors, crafting market-based opportunities with risk mitigation. Their focus spans solar energy, financial inclusion, and affordable housing, uplifting underserved communities. Founded in 2016 as a new generation impact investment manager with long-standing impact investment expertise in companies serving customers at the bottom of the pyramid, SIMA manages 3 Funds with assets under management of $180 Million in 50 companies and 20 countries. |
