The African Development Bank (AfDB) approved a ~$27.78 million proposal to secure a loan from Société Générale de Banque in Côte d’Ivoire (SGBCI), Crédit Agricole Corporate, and Investment Bank (Crédit Agricole CIB) to help Zola EDF Côte d’Ivoire (ZECI), an African solar power kit supplier.

The loan will be available in the local currency and AfDB will act as partial credit guarantor by covering part of the guaranteed loan facility.

“The financing is in line with the 2016-20 National Development Plan of Côte d’Ivoire, the Strategic Plan for the energy sector, and the Electricity for All program initiated by Ivorian authorities to electrify all localities by 2020,” said Amadou Hott, the African Development Bank’s vice president in charge of energy.

The initiative will provide solar home systems to approximately 100,000 rural households based on pay-as-you-go (PAYGO). It is the first large-scale local currency financing model for the off-grid renewable energy sector in Africa. The Grameen Crédit Agricole Foundation will also participate in the funding of ZECI while monitoring environmental and social rules.

According to the World Bank, the global PAYGO solar industry has attracted over $773 million in funding over the last five years. The estimated impact of these investments has been far-reaching, with approximately $5.2 billion in economic savings to households as they switch from conventional fuels to off-grid solar devices.

This project will also benefit the bank’s High 5S vision, “Light Up and Power Africa.” It aims to power 75 million African households by 2025.

Last year, AfDB approved $324 million in loan support for two renewable energy projects, in Morocco and Côte d’Ivoire. The loan is in line with the New Deal on Energy for Africa.

Earlier, Mercom reported that AfDB approved a $1.5 million grant from the Sustainable Energy Fund for Africa (SEFA) to support the Nigerian government’s implementation of Phase 1 of the Jigawa 1-GW Independent Power Producer (IPP) Solar Procurement Program.

Off-grid solar has a bright future in poor and underdeveloped parts of the world, while the funding for these emerging markets has also witnessed a significant increase over the years. According to Mercom’s Solar Funding and M&A Reports, the global off-grid solar market saw deals worth $97 million in 2015. While approximately $147 million was raised in 2016, the sector witnessed exponential growth in 2017 and raised a whopping $243 million.

Image credit: AfDB