Press Release: Bamboo Capital Partners, the Government of Madagascar and the World Bank Partner To Launch USD$40 Million Energy Access Fund for Madagascar
Bamboo Capital Partners (‘Bamboo’), the impact investing platform, has been appointed by the Government of Madagascar and the World Bank as the international fund manager for the Off-Grid Market Development Fund (‘OMDF’ or ‘the Fund’), a USD$40 million renewable energy access fund.
OMDF was established in April and launches its financing operations with a first window for proposals for results-based financing (RBF) from 28 October to 8 December. In parallel, OMDF will also provide debt financing to solar distributors and financial institutions that finance end-customers or solar distributors in Madagascar.
Société Générale Madagasikara has been appointed to host the OMDF funds and provide the financing.
OMDF aims at improving electricity access for households and SMEs in Madagascar through off-grid solar energy solutions. In 2020, it is estimated that less than a quarter of the Malagasy population has access to electricity. Rural areas of the country are unequally electrified, with electrification rates around 5%. Madagascar offers a potential customer base of 2.5 to 5 million households for solar lamps and market entry solar home systems. The Fund will target companies that provide Malagasy households with quality products that are Lighting Global / VeraSol certified.
The Fund was initiated by the Government of Madagascar, with funding from the World Bank. Bamboo’s partnership with Société Générale Madagascar combines the local market knowledge of Société Générale Madagascar with Bamboo’s deep expertise of managing international funds that invest in clean energy access solutions.
“Energy access remains a critical global challenge, with 800 million people without access to a reliable source of electricity. This problem is particularly acute in Madagascar, where access to electricity is a challenge for the large majority of households, especially those in rural areas of the country,” saidJean-Philippe de Schrevel, Founder and Managing Partner of Bamboo Capital Partners. “OMDF builds on our decade of experience investing in the renewable energy sector and we are looking forward to collaborating with the Government of Madagascar, the World Bank and Société Générale Madagascar to provide clean, reliable and decentralized sources of energy to the underserved Malagasy population.”
The Fund will offer both an RBF facility and a credit line for off-grid solar companies and financial institutions active in the off-grid solar sector.
RBF grants support off-grid solar distributors in developing their operations in Madagascar. The grants subsidize companies that offer quality products and services, with additional incentives for those offering end-customer financing solutions via pay-as-you-go models or through MFIs. This facility will also help new market participants overcome entry barriers through a partial prepayment of the RBF grant. OMDF will accept grant proposals from 28 October to 8 December 2020 and again from early 2021.
OMDF’s credit offering specifically finances working capital, stock building of quality products and end-consumer financing. It will also contribute to create credit history in Madagascar to attract further private sector financing.
LEAD Project Coordinator, Jacquis Randriamahazomana, said: “OMDF aims to improve access to electricity for households, especially those scattered, far from the grid, and for SMEs, through the use of solar products in Madagascar. The project will thus support the main objective of the Government of Madagascar’s energy policy, namely “to ensure universal access to reliable, sustainable and modern energy services at an affordable cost” in line with the implementation approach of prioritizing socially equitable renewable energy solutions”.
Zdenek Metelak, Chief Executive Officer of Société Générale Madagasikara, added: “Société Générale Madagasikara and the entire Société Générale Group are extremely honored to contribute to this initiative. This large-scale project is perfectly in line with our commitment to the development of renewable energy, which is part of the Société Générale Group’s Grow With Africa program. We are thus committed to energy operators who support renewable energy projects and energy inclusion of populations.”
Photo courtesy of Dfid – UK Department for International Development.