Sima Off-Grid Solar and Financial Access Senior Debt Fund I B.V.
Status: Completed investmentWhy disclosure?
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Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our customer
SIMA Off-grid Solar & Financial Access Senior Debt Fund is managed by Social Investment Managers & Advisors (“SIMA”), a first-time fund manager. The fund focuses on SSA (~70%) and Asia (~30%), and provides debt financing to companies in solar energy access (60%-70%) and financial access (30%-40%).
What is our funding objective?
i) Solar energy access (60-70%): financing inventory and working capital for off-grid companies, including portable solar lights and solar home systems, and their distributors. ii) Financial access (30-40%): micro finance institutions, which provide access for financing to end consumers for the purchase or leasing of energy products.
Why do we fund this investment?
The fund will invest in off-grid solutions such as solar-home-systems. The key area of growth for these products are rural populations with no connectivity to grid electricity. Providing these communities with (renewable) energy is a crucial step in the development of these communities. The same holds for the microfinance entities in which the fund will invest, who will provide funding to small scale rural entrepreneurs.
What is the Environmental and Social categorization rationale?
As it concerns a fund, all PS could be triggered depending on the investee companies. This is a Category B project due to the limited E&S risks associated with the fund’s portfolio that focuses on small and medium companies providing off grid solar market solutions - such as solar lights and larger home solar systems to consumers’. The fund also focuses on microfinance institutions. E&S health and safety in supply chain provides a potential albeit low risk. SIMA has an ESG policy in place that was recently updated. SIMA ESG policy prohibits them to invest in E&S category A projects. As part of SIMA’s process, SIMA request ESG audits from borrowers and when needed hires external consultants to cover environmental health and safety issues relevant for the supply chain of off-grid solar industry’ as well as labor and working conditions, portfolio companies’ governance, employment and human resource policies for compliance with occupational health and safety, and other applicable labor laws and requirements are assessed. SIMA will work to ensure that solar companies receiving SIMA’s support are environmentally and socially sustainable. Where deemed applicable, SIMA encourages their clients to integrate the three R’s” of waste management (recycle, reuse, reduce) into their businesses and report on their waste management practices.
More investments
| Date | Total FMO financing |
|---|---|
| 2/28/2023 | USD 3.00 MLN |
- Region
- Africa
- Country
- Africa
- Sector
- Energy
- Effective date
- 8/22/2017
- End date
- 2/28/2023
- Total FMO financing
- USD 7.00 MLN
- Funding
- AEF-I
-
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk
Environmental & Social Category
(A, B+, B or C) - B