Some 650 million people in total will still not have access to electricity in 2030 worldwide, mainly in sub-Saharan Africa, if no strong political commitment is made. Access to energy has increased considerably in recent years, with the number of people without electricity decreasing from 1.2 billion in 2010 to around 840 million in 2017. Nevertheless, the poorest countries and the most remote regions of Sub-Saharan Africa are the ones permorming below average.
The company:
ZECI SAS (ZOLA EDF Côte-d´Ivoire) is a joint venture of an American company OGE (Off-grid electric) now ZOLA ELECTRIC and the French Multinational EDF (Electricité de France). For three years now, ZECI SAS, with its ZOLA brand, has provided the Ivorian population with reliable, sustainable and available energy systems throughout the territory.
Impact:
The frequent blackouts in Africa have multiple consequences in terms of economic development or daily life, in particular on education. The deployment of solar energy will therefore improve the living conditions of thousands of households but also have an impact on the education of children. The company, which became operational within a few weeks, is a leader on the Ivorian market and employs over 400 local employees in the sale and maintenance of solar kits.
After several months of work, a securitisation pilot project initiated by Crédit Agricole CIB and the Grameen Crédit Agricole Foundation has been launched in Ivory Coast. It will help to support the access to energy and financial inclusion for the rural populations in Ivory Coast.
A technology-enabled project with a strong impact
Access to energy is one of the major challenges in Africa: more than 620 million people lack access to electricity and continue to use battery-powered flashlights and oil lamps, in spite of the toxic effects on their health and on the environment. This fuel poverty particularly affects rural populations living in areas without access to electricity grid.
The financing of ZECI’s (Zola EDF Cote d’Ivoire) “Solar Home Systems” business aims to address this issue by providing solar home systems to off-grid populations in Ivory Coast. ZECI is a company co-founded by EDF and Zola Electric that sells on credit and ensures the maintenance of solar kits to meet the needs of rural off-grid populations. This offer is presented in the form of three-year sale on credit contracts, with payments being made via mobile money and with pay-as-you go flexibility: the customers can adjust the payment over time based on their available income. In order to support the company’s development, several financial players joined forces to provide this financing offer in the form of a securitisation structure backed by the receivables arising out of the pay-as-you-go contracts.
An innovative structure
To fund the development of ZECI, a securitisation vehicle (NEoT CI) was created, which purchases and the solar home systems and the sale-on-credit contracts signed with the off-grid customers. This vehicle is owned by the company NEoT Off-Grid Africa, a platform dedicated to investments in off-grid projects in Sub-Saharan Africa, managed by NEoT Capital and controlled by the infrastructure fund Meridiam, with Mitsubishi Corporation and EDF as co-shareholders.
Bankers committed to development
The financing of the vehicle (NEoT CI) was structured in the form of a securitisation by Crédit Agricole CIB, Société Générale CIB and Société Générale Côte d’Ivoire (SGCI), with an equity portion provided by NEoT Off-Grid Africa and a senior loan in local currency of 11.80 billion CFA francs (or about €18 million) granted by SGCI with guarantees provided by the African Development Bank (ADB) and Crédit Agricole CIB.
In addition to participating in the implementation and financing of the project, the Grameen Crédit Agricole Foundation will also be in charge of monitoring the project’s social and environmental performance.
The senior loan drawdown will be adjusted based on the growth and performance of the portfolio.
This financing will allow ZECI to strengthen its economic model and to increase its impact in rural areas in the Ivory Coast.
Study tour and 4th African Facility Forum in Ivory Coast
For the very first time the Study tour, a yearly-planed event aimed at making Board members meet the Foundation’s partners, has been organised simultaneously with the Annual Forum of the African Facility, a technical assistance programme created in 2013 in partnership with the Agence Française de Développement (AFD). From the 8th to the 12th of July, partners and Board members were able to discuss, to strength their knowledge on the specificities of the Foundation’s activities and to explore new lines of action for the coming years. Panel discussions, training days and field visits: plenty of key moments marked this strategic week for the Foundation.
The first day of the week started in Abidjan with the opening ceremony of the 4th Forum of the African Facility. After a first phase that benefited 16 rural microfinance institutions in Sub-Saharan Africa, the second phase of this program will take place from 2017 to 2020 and is expected to provide over 20 institutions with funding and technical assistance. The 4th Forum was the occasion to present the main outcomes and perspectives of the programme.I It was marked by inspiring exchanges between Board members and 16 microfinance institutions supported by the African Facility.
Throughout the following days, the African Facility’s partners participated in trainings focused on digital and agricultural supply chain finance. Besides, Board members took part in two field visits. The first visit allowed them to discover the functioning of a cocoa cooperative located in Tiassalé that receives a financial support from Advans, a partner of the Foundation. The day after, a second field visit to Akpesekro was the opportunity for Board members to find out more about the ZECI project, an initiative aimed at facilitating access to electricity in rural areas through the commercialization of off-grid solar kits. The Foundation participates in the financing of the operating company, ZECI[1], in cooperation with CA-CIB’s securitization team. It will also ensure the follow-up of the project’s social and environmental performance.
Before the closing cocktail, a Foundation’s Board meeting was held . The meeting was focused on the 2019-2023 Strategic Plan whichbenefited from relevant inputs raised by the African Facility partners. The Strategic Plan will be officially presented in November during the “Sustainable Finance Week”, organized in partnership with Credit Agricole to celebrate the Foundation’s 10th anniversary. A photo exhibition, panel discussions and a special ceremony are part of the program and will reaffirm the Foundation and Crédit Agricole Group’s commitment towards a more inclusive and responsible finance.
[1] Enterprise co-founded by EDF and Off-Grid Electric (OGE).
