GreenYellow, Axian, Societe Generale, GuarantCo and African Guarantee Fund have closed a Managing General Agent (MGA) 73.8 billion (€16.2 million/$19 million) transaction for the debt funding of the largest solar power plant in Madagascar.
The 20 MW solar power plant in Ambatolampy shows the country’s commitment to transition to green energy. GreenYellow built and has been operating the plant since 2018.
GreenYellow is an operator of green energy in Madagascar; Axian is an impact-oriented Pan-African group with holdings in various sectors and countries; Societe Generale is a multinational investment bank; GuarantCo is the guarantee arm of the Private Infrastructure Development Group (PIDG) company; African Guarantee Fund.
In the build-up to this transaction, Axian acquired 51% of the solar plant’s shares in June 2020; Societe Generale who is acting as sole arranger and co-lender with BNI and BMOI raised €16.2 million / $19 million debt; GuarantCo provided additional support with guarantees of MGA 36.9 billion ($9.3 million); The African Guarantee Fund provided MGA 14.8 billion ($3.8 million).
The transaction will also present GreenYellow and AXIAN the opportunity to accelerate investments in new greenfield projects in Madagascar, and make them a key contributor to the country reaching its objective of an 80% renewable energy mix by 2030 and improving its energy security.
The plant is also a key contributor to the reduction of carbon emissions in Madagascar, reducing emissions by 17,000 tons of CO2 per year. The transaction will help provide access to clean, affordable and reliable energy to households and companies, create local jobs and allow for economic development.
The Chief Executive Officer of GreenYellow, Otmane Hajji said, “With this transaction and this new partnership, GreenYellow is reinforcing its strong presence in Madagascar and in the Indian Ocean, where we are already the first producer of clean energy. The refinancing of the Ambatolampy power plant will allow GreenYellow and Axian to go further and finance the development of future renewable energy projects in Madagascar.”
The Chief Executive Officer of Axian Group, Hassanein Hiridjee said, “The Axian Group is proud to participate in this major project. It reaffirms our determination to providing wider access to clean and affordable energy, and to contributing to many economic and energy objectives in Madagascar all at once.”
The Head of International Retail Banking for Africa, the Mediterranean Basin & Overseas at Societe Generale, Laurent Goutard said, “Financing the renewable energies sector is one of Societe Generale group main commitments and is fully in line with “Grow with Africa”, the strategic plan for the African continent. Pulling expertise and resources from our local branch, supported by our dedicated structured finance platform in Ivory Coast, we are very proud to be the sole arranger of this transaction.”
The Chief Executive Officer of GuarantCo, Lasitha Perera said, “GuarantCo’s involvement will help to increase private sector activity in the Malagasy renewable energy sector by reducing the high costs of funding, contribute to creating an enabling environment for private, domestic, local currency financing and support project development. The transaction is helping to crowd in three private sector banks to lend to a solar power plant and is playing a major role in building the capacity of these local banks to finance these types of projects which is key for the development of future projects in Madagascar.”
The Chief Executive Officer of African Guarantee Fund, Jules Ngankam said, “Renewable energy is among the priority investment sectors of AGF. We are delighted to co-guarantee this power plant with GuarantCo and to ultimately contribute to the achievement of renewable energy mix in Madagascar. Through this partnership, we will increase our mandate in Madagascar, where we have so far unlocked USD 21 million of SME financing and created more than 1000 jobs.”