Project detail - Dedougou Solaire S.A.R.L.

Who is our prospective customer?

FMO is investing in Dédougou Solaire SARL (“Dédougou”), an SPV (Special Purpose Vehicle) established under the laws of Burkina Faso with a total debt of EUR 10.9 million, catalyzing another EUR 6 million from the African Development Bank/ Sustainable Energy Fund for Africa (AfDB/SEFA). The Sponsors are MIHIA Holding S.A.S (70% shareholding) and Syscom Network SA (30% shareholding). MIHIA Holding was established in 2021 as an investment platform and is a joint venture between Qair International (“Qair”) (51%) and STOA (49%).

What is our funding objective?

FMO’s loan of EUR 10.9 million (FMO Building Prospects Fund) will catalyze another EUR 6 million from the AfDB/SEFA. This financing will allow for the development, construction, operation and maintenance of an 18MWp solar farm at Souri near Dedougou, with a total project cost of EUR 20.4 million.

Why do we want to fund this investment?

This is a greenfield renewable energy development in a low-income sub-Saharan country. Dedougou will provide clean, reliable electricity to a country that has one of the lowest electrification rates in West Africa at a lower price than current thermal power stations or imports of electricity. The FMO-Building Prospects Fund investment is highly additional as there are no commercial banks in Burkina Faso that can provide financing over the tenor and terms required to make the projects work. This project is among the first true energy IPPs in an emerging economy with relatively poor access to electricity.

What is the Environmental and Social categorization rationale?

The applicable E&S Category is B+. All of IFC’s Performance Standards (PSs) are triggered except PS7, as there are no indigenous groups affected by the project. The key E&S focus areas include marginal economic displacement, security personnel, community engagement, benefit sharing and minimizing impacts on biodiversity, including some levels of biodiversity restoration. While local communities and authorities are supportive of the project, proactive management of the project-community relationship and avoiding project-induced intra-community tensions are key areas on which the company will continue to focus its efforts. This is particularly relevant given the fragile security context in Burkina Faso, where minor issues can escalate fast. A project-specific environmental and social management system with plans and procedures addressing all relevant areas, including the above, will be implemented by the project company and cascaded down to contractors and subcontractors.

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Date	Total FMO financing
8/10/2024	EUR 2.50 MLN