GCPF develops innovative debt-financing structure with off-grid-energy provider Mobisol
The Global Climate Partnership Fund, along with another responsAbility-managed energy fund, has signed an off-balance-sheet debt deal with Mobisol, a leading player in decentralized solar electrification. This cooperation will fuel the continued growth of Mobisol in Tanzania and provide financing for electrifying more than 15,000 households and small businesses. The deal is one of the largest special purpose vehicle debt transaction structures in the off-grid solar sector.
The innovative new financing structure for debt financing involves local special purpose vehicles (SPVs) that ring-fence receivables from specific Mobisol customers exclusively for the responsAbility-managed funds. The structure has been labelled MOOVE (MObisol Offgrid financing VEhicle).
Complicated intercreditor agreements that typically make on-balance sheet lending cumbersome are thereby avoided. With the new structure, Mobisol is now in a position to offer tailor-made debt financing solutions for future lenders. At the same time MOOVE is infinitely scalable, can easily be replicated in Tanzania and other countries and reduces transaction costs.
The financing mechanism is already attracting interest from further lenders and should greatly ease access to debt capital. At the aggregate level, MOOVE will be able to help structure what could become a completely new asset class in the pay-as-you-go (PAYG) universe, thereby attracting a new range of commercial and institutional investors who have been waiting for an easy and secure investment vehicle.
Hartmut Schuening, CFO Mobisol, said: “Mobisol is proud to have partnered with GCPF and responsAbility in order to devise MOOVE, a ground breaking new financing structure for debt financing. We believe the mechanics will make a significant contribution to the growth of the PAYG sector as a whole”.
Speaking on behalf of GCPF, Stefan Issler, Head of Energy Debt Financing – Direct Investments at responsAbility Investments, noted that “Through its pay-as-you-go business model, Mobisol provides underserved Tanzanian households and businesses with an affordable and reliable off-grid electricity supply – an important prerequisite for further economic growth and development in the country. We are pleased to be able to provide easy-to-access financing for the further growth of this impactful business."
Mobisol, a leading player in decentralized solar electrification, offers a clean and affordable alternative to fossil fuels for lower-income households and small businesses in rural sub-Saharan Africa. Combining solar energy hardware with mobile payment technology, Mobisol designs, procures, distributes and services large solar home and commercial systems. The company enables rural families and business owners to power a range of appliances, such as televisions, stereos and refrigerators to thereby improve their standard of living and earn incremental income by establishing solar-powered businesses. Mobisol provides a credible alternative to a grid connection that millions have been waiting for in vain, and ensures affordability through flexible payment plans.
