FMO proposes investment in West African solar company

22 Jun 2022

FMO: Proposed Investment 

Who is our prospective client?

SolarX is a Commercial and Industrial (“C&I”) solar rooftop business active in Mali, Burkina Faso and Senegal. SolarX offer affordable, clean and reliable power assets with attractive economics to its customers that rely on high cost gensets and/or an unreliable (and expensive) grid. SolarX specializes in the development, construction and operation of grid-connected, stand alone and hybrid solar PV installations in Mali, Burkina Faso and Senegal.

What is the funding objective?

FMO proposes to invest up to EUR 5m (consisting of EUR 2.5m (with an option for a EUR 500k top-up) through a convertible note and EUR 2.5m mezzanine. FMO investee Energy Access Ventures Fund (“EAVF” or the “Fund”), has invested EUR 4.5m in the Company’s previous round through EUR 1.5m in equity and EUR 3m in Mezzanine.

Why do we want to fund this project?

SolarX provides clean, affordable power in Mali, Burkina Faso and Senegal (least developed countries and highly vulnerable to climate change), thereby positively affecting access to electricity, reducing the cost of electricity, displacing polluting diesel-powered electricity generation and thereby reducing CO2 emissions and creating local employment.

Environmental and social rationale

E&S Category B+ due to risks related to solar PV construction, operation, and maintenance activities, battery storage systems and higher-risk off-takers (mining; heavy industry) in West Africa. Key E&S risks include decent work conditions, waste management, land-related social and environmental issues, contextual human rights risks in fragile states as well as the human rights issues in the global solar supply chain. The transaction will be managed in accordance with IFC Performance Standards 1, 2, 3, 4, 5 and 6. Performance Standard 7 and 8 are not triggered since there are no anticipated impacts on indigenous peoples and cultural heritage. The Company has an E&S Management System and dedicated E&S team that will be strengthened as part of FMO’s investment.

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