ZOLA Electric, formerly Off Grid Electric, FMO, the Dutch entrepreneurial development bank and Symbiotics, an investment firm specialized in emerging, sustainable and inclusive finance have announced a $32.5 million facility to finance the growth of ZOLA’s Tanzania operations over the next 5 years.
The investment is also expected to create around 2,100 new jobs in off-grid solar. ZOLA currently powers more than 1,000,000 customers across 5 countries and employs more than 1,000 people.
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.
Reliable electricity is transformative. It boosts economic productivity, expands opportunities for work and study, drives positive social, health and environmental outcomes and improves overall quality of life.
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.
Bill Lenihan, Co-CEO, ZOLA Electric 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.”
Chris Wurdemann, Vice President of Corporate Finance, ZOLA Electric added: “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.”
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.
Vivek Pradhan, Head of Market Innovation, Symbiotics 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. Symbiotics will continue to support the provision of accessible clean energy to under-electrified households, businesses, and communities in emerging markets.”