Société Générale acted as the main lender. GuarantCo provided a guarantee of MGA 23.6 billion (EUR 5 million) and AGF a guarantee of MGA 9.4 billion (EUR 2 million). This is the second phase of an existing 20 MW solar power plant operation that GuarantCo and AGF helped refinance in 2020.

The project will provide improved electricity access to around 285,000 people supporting SDG 7 and reduce emissions by 34,000 tonnes of CO₂ through the displacement of thermal power supporting SDG 13. Only 15 percent of the population have access to electricity with considerable disparity between urban (79 percent) and rural (8 percent) areas.

GuarantCo has been the first company to mobilise local currency from commercial banks for utility scale solar projects in Madagascar. Through demonstration and replication, this is expected to enhance the resilience of the power sector by diversifying away from thermal power, reducing the cost of generation and improving the sustainability of the state-owned electric utility and water company in Madagascar.

This is GuarantCo and AGF’s second transaction with GreenYellow.  In October 2020, GuarantCo provided a MGA 36.9 billion (USD 9.3 million) guarantee and AGF a guarantee of MGA 14.8 billion (c. USD 3.8 million) to refinance the operational 20 MW Ambatolampy solar power plant, the first grid connected and largest solar plant in Madagascar. This 20 MW power / 5 MW battery extension is testimony to the replicability of such projects and the viability of local currency financing for solar plants in Madagascar.

GuarantCo has played an active role in shaping the transaction with its ability to mitigate risks and lower the cost of financing. This has led to additional local capital becoming available through BFV Société Générale Madagasikara and Banque Nationale d’Investissement Madagascar.

Layth Al-Falaki, CEO of GuarantCo, said:

Pierre Marouby, CEO of GreenYellow Indian Ocean, said: “The completion of this transaction demonstrates the commitment of our financial partners and reaffirms their confidence in GreenYellow and our business model. With this new financial achievement, GreenYellow reinforces its strong presence in the Indian Ocean, where we are already the leading producer of photovoltaic energy.”

Jules Ngankam, Group CEO of African Guarantee Fund, said: “Together with GuarantCo, our initial credit guarantee to Green Yellow has provided access to clean, affordable and reliable energy to households and companies in Madagascar, whilst creating local jobs and stimulating wider economic development.  As the largest solar power plant in Madagascar, Green Yellow will now have even more significant impact in accelerating the country’s green energy transition. Thanks to this second guarantee line which has helped double the capacity of the Ambatolampy plant, AGF is delighted to support Madagascar’s sustainable economic development.”

Zdenek Metelak, CEO of Societe Generale Madagasikara, said: “Société Générale is very happy to have finalized the second phase of this landmark transaction. This emphasizes the very specific position the bank holds in Madagascar being able to structure complex operations and stand-by on the long run beside its clients. This innovative financing is part of the Grow With Africa initiative launched by Societe Générale Group six years ago and illustrates the major role we play to build a sustainable future in Africa.”