MySol Grid Zambia (ENGIE) to construct 60 mini-grids – USD 7.5 million of debt transaction signed with Cygnum Capital
30 June 2023 – On June 29th 2023, FEI signed finance documents to provide USD 7.5 million of senior debt to MySol Grid Zambia. This transaction structured by FEI provides MySol Grid Zambia (“ENGIE”) with the necessary funding and flexibility to construct mini-grids under the Increased Access to Electricity and Renewable Energy Production (“IAEREP” programme, 11th European Development Fund). As part of IAEREP, the European Union previously allocated EUR 6 million grants to MySol Grid Zambia in the context of the EU Global Gateway initiative. By scaling up adoption of off-grid energy in Zambia, this initiative will provide economic and social opportunities for families and small businesses who cannot be connected to the electricity network.
ENGIE will construct, own, operate, and maintain the mini-grids, ensuring that the residential, commercial, and productive use customers receive clean, reliable electricity while delivering high-quality and customer centric services. Expanding on its energy access track record across Sub-Saharan Africa, ENGIE sees huge value in the development of the mini-grid business in Zambia. This agreement to provide long-term debt financing represents further progress in the African mini-grid space, expanding energy access to grid-unserved communities, creating economic growth and increasing socio-economic welfare in the community.
“Small scale renewable infrastructure and mini-grids are fundamental in driving economic and social development across Africa. This inaugural transaction in the mini-grid sector demonstrates FEI’s commitment to improving energy access and supporting transactions with high development impact designing innovative structures with a commercial approach.”, said Carmen de Castro, Fund Manager at Cygnum Capital Asset Management.
“Attracting non-recourse long-term debt financing for mini-grid projects is proof of the viability of the business model and the legitimacy of renewable mini-grid projects in the rural electrification landscape. This financing will contribute to the Sustainable Development Goals of the United Nation by providing almost 5 MW of affordable, reliable, and sustainable clean energy to more than 40,000 beneficiaries living in rural areas in Zambia.” said Gillian-Alexandre Huart, CEO of ENGIE Energy Access.