FEI, a leading finance institution, has finalized an agreement to provide USD 7.5 million in senior debt to MySol Grid Zambia, a subsidiary of ENGIE. This strategic transaction, structured by FEI, aims to support the construction of mini-grids as part of the Increased Access to Electricity and Renewable Energy Production (IAEREP) program funded by the 11th European Development Fund. Previously, the European Union allocated EUR 6 million in grants to MySol Grid Zambia through the EU Global Gateway initiative.
The IAEREP initiative seeks to promote the adoption of off-grid energy solutions in Zambia, providing economic and social opportunities to households and small businesses that are unable to access the national electricity network. ENGIE will spearhead the development, ownership, operation, and maintenance of the mini-grids, ensuring clean and reliable electricity supply to residential, commercial, and productive use customers. ENGIE’s experience in energy access projects across Sub-Saharan Africa positions them well to drive the growth of the mini-grid business in Zambia.
This long-term debt financing agreement represents a significant milestone in the African mini-grid sector, expanding energy access to communities without grid connectivity. The project is expected to deliver nearly 5 MW of affordable, reliable, and sustainable clean energy, benefiting over 40,000 individuals in rural areas of Zambia. The development aligns with the United Nations’ Sustainable Development Goals, contributing to socio-economic welfare and fostering economic growth in the community.
Carmen de Castro, Fund Manager at Cygnum Capital Asset Management, emphasized FEI’s commitment to improving energy access and supporting impactful transactions in the mini-grid sector. The successful financing of this project underscores the viability of the mini-grid business model and reaffirms the legitimacy of renewable mini-grid projects within the rural electrification landscape.
Gillian-Alexandre Huart, CEO of ENGIE Energy Access, highlighted the significance of securing non-recourse long-term debt financing, emphasizing the credibility and potential of renewable mini-grid projects. The financing will play a vital role in achieving the United Nations’ Sustainable Development Goals by providing sustainable, affordable, and reliable clean energy to rural communities in Zambia.
