Dutch development bank FMO and specialist financier Symbiotics have agreed a $32.5m facility with Zola Electric, the brand name of Off Grid Electric, which is intended to finance the expansion of the company’s operations in Tanzania over the next five years. During those five years Zola plans to provide electricity to an additional 145,500 households, creating 2,100 new jobs in the off-grid industry.
FMO and Symbiotics join a raft of strategic investors in Zola, including Tesla, Total, DBL Partners, Helios Investment Partners, GE Ventures, and SunFunder.
The loan includes $5m from the FMO-managed Access to Energy Fund (AEF), as well as $12.5m from FMO and $15m from Symbiotics, which has been lending to Zola since 2017. The loan tenor is five years and is denominated in Tanzanian shilling. FMO has also provided Zola with technical assistance to put in place a credit scoring system.
AEF fund manager Rosemarijn van der Meij said, “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 in the way on its path towards profitability.”
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