FMO is the lead arranger in the financing package that will grow ZOLA Electric’s service delivery in Tanzania, helping an additional 145,500 households to access energy in areas with no grid infrastructure.
The investment is also expected to create around 2,100 new jobs in off-grid solar.
ZOLA currently powers more than a million customers across 5 countries and employs more than 1,000 people.
Globally, 2.2 billion people still don’t have access to reliable or affordable energy.
ZOLA Electric and other energy access companies play a critical role in delivering clean, affordable, reliable energy without the need for grid infrastructure.
Between 80-90 per cent of Tanzanian’s lack access to electricity.
Most families living in rural off-grid areas use kerosene lamps burning fuel inside their houses and polluting the air with harmful particles. These particles can irritate the eyes and lungs and also put children at risk of accidentally burning themselves.
Reliable electricity is transformative in that it boosts economic productivity, expands opportunities for work and study, drives positive social, health and environmental outcomes and improves overall quality of life, according to Zola.
Despite the rapid growth of ZOLA Electric’s sector, there is still significant unmet need and untapped potential. There is growing recognition of the potential for distributed renewable energy to disrupt power supply and the sector is attracting significant investment interest.
ZOLA Electric Co-CEO Bill Lenihan said, “We are excited to announce this new investment from FMO and Symbiotics. It will allow us to connect more people in Tanzania, support the communities in which we operate and continue the development of our industry-leading power systems.”
As one of the first organizations to offer pay-as-you-go solar home systems, ZOLA made basic electricity services like clean, bright light and phone charging accessible to the poorest for as little as USD 0.19 a day.
There has been a notable growth in the pay-as-you-go solar home systems in East Africa thus the need for the partnerships.
“ZOLA’s technologically advanced product offering and innovative business model have attracted an incredible group of strategic and capital partners. FMO and Symbiotics join a roster of strategic and capital partners that is the strongest in the industry, including Tesla, Total, EDF, DBL Partners, Helios Investment Partners, GE Ventures and SunFunder,” said ZOLA Electric’s Vice President of Corporate Finance, Chris Wurdemann.
Rosemarijn van der Meij, Fund manager of the Access to Energy Fund (AEF), managed by FMO: “The off-grid sector is developing fast and receiving increased attention from investors but is still perceived as high risk; few players have reached profitability. ZOLA Electric Tanzania has a dedicated and professional management team and is well on the way on its path towards profitability. This transaction fits FMO’s inclusive business and green strategy as well as the core theme in the strategy of the Access to Energy Fund: providing access to energy for the unreached rural communities.”
Next to the current financing, FMO provided Technical Assistance to ZOLA, to put a credit scoring system in place. The FMO-arranged senior loan will consist of USD 5 million from the Access to Energy Fund (AEF), which catalyses the investment of USD 12.5 million from FMO-A and USD 15 million from Symbiotics. The tenor of the loan is five years. ZOLA Electric borrows the money in its local currency, the Tanzanian shilling.
Symbiotics Head of Market Innovation, Vivek Pradhan, said, “As an existing provider of debt financing to ZOLA since 2017, we are excited to grow our partnership with one of the earliest leaders of the effort to electrify Sub-Saharan Africa through affordable solar power.”
He added that Symbiotics will continue to support the provision of accessible clean energy to under-electrified households, businesses, and communities in emerging markets.”
ZOLA designs, manufactures, installs, and maintains its solar home system.
The system is significantly different from the traditional home solar system in that it is extremely efficient with power; it has a design life of more than a decade; it uses next-generation batteries; it has advanced value-engineered electronic controls; and, it incorporates a pre-paid time-based metre.
ZOLA deploys its energy solutions in five African countries Nigeria, Tanzania, Rwanda, Côte d’Ivoire, and Ghana.