The corporate bond issued by the start-up Africa GreenTec has won over its first investors – nearly 1.7 million of the 10 million euro bond has already been placed. Africa GreenTec is using the capital to finance the delivery and installation of mobile solartainers in Mali. The first ten systems are currently being built or have already shipped. With the bond, the start-up is carrying out the first self-sustaining private sector investment project to forgo any development aid. Among the initial subscribers is GLS Bank’s climate fund, which focuses specifically on financing climate-friendly projects.
Clean, decentralised power
Africa GreenTec is planning to use the solartainers financed by the bond to provide power to as many as 50 villages in Mali. The mobile 40-foot containers include a 45 kilowatt peak (kWp) photovoltaic installation and a 60 kilowatt hour (kWh) battery storage system, which allows the solar power generated to be used in the evenings. “We are laying the foundation for our work in Mali, but over the medium term, we want to take action in other countries in order to become Africa’s largest supplier of decentralised energy and water,” says Torsten Schreiber, Founder and CEO of Africa GreenTec.
The power generated by the mobile solar power plants in Mali will be sold to local villagers at fair prices, with the proceeds being used to cover the costs of operating and maintaining the containers as well as for debt service. The bond is being issued by Africa GreenTec Asset GmbH and offers 6.5% interest per annum. Given the prevailing low interest rates, this represents a comparatively high rate of return for Germany, but is rather conservative by African standards. The high rate of return is made possible by spreading the investment across many thousands of new energy customers.
Sustainable investment
With the bond, Africa GreenTec is positioning itself as the first investor in an African country to offer a self-sustaining economic model that operates without any tax-financed development aid. In terms of its impact on the United Nation’s Sustainable Development Goals (SDGs), the accredited consulting firm imug gave the bond a “very good” rating. The stand-alone solar system has also undergone a yield assessment by TÜV Rheinland.
The bond is being offered primarily to institutional investors as part of a private placement and has been structured by AHP Capital Management GmbH. The minimum investment is 100,000 euros. Interested investors may contact the Frankfurt-based firm for more information.
Africa GreenTec sees development cooperation as a process in which local residents participate as equals. Its business model involves the use of private funds to address the causes of the refugee crisis. This makes the bond a sustainable social investment consistent with the UN’s SDGs.
The scalable infrastructure project is directed at family offices, sustainability and microfinance funds and values-oriented banks. In 2017, the GLS Bank started its third such fund, the GLS Bank climate fund, which tripled its initial volume to 30 million euros in just four months. The fund invests in companies, countries and selected green bonds. By participating in the project bond, it is aiming to strengthen GLS Bank’s pioneering role in impact investing. As a lead investor in the project bond, the climate fund has financed the first solartainer which is already on its way to Mali.
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Source: https://www.pv-magazine.com/press-releases/first-subscribers-to-africa-greentecs-corporate-bond/