WINCH IPP HOLDINGS LIMITED
Status: Approved 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
The transaction concerns a senior secured debt facility to Winch IPP Holdings Limited, to finance a mini-grid portfolio owned by Winch Energy Limited and NEOT Offgrid Africa. The mini-grids are 100% green and comprise of a solar generating and battery storage unit, as well as the associated distribution infrastructure. Winch is one of the market leaders in a very early stage sector offering a scalable model based on its standardized and modular mini-grid technology.
What is our funding objective?
The transaction finances a mini-grid portfolio in several African jurisdictions. The portfolio will initially consist of 24 mini-grids in Sierra Leone and 25 in Uganda, representing 2.1MW of installed capacity and between 6.2k and 10k connections. The facility may be expanded going forward with additional mini-grid programs.
Why do we fund this investment?
Lack of energy and financial access to the Bottom of the Pyramid continues to hold back social and economic development in Sub-Saharan Africa. Uganda and Sierra Leone are amongst the poorest least developed countries. Their low rural electrification rates of around 8% and 1% respectively, make the company’s business model highly relevant. The transaction fits FMO’s distributed energy, inclusive business and green strategies as well as Access to Energy Fund’s strategy.
What is the Environmental and Social categorization rationale?
The project is a B+ risk category according to FMO’s Sustainability Policy and in line with IFC’s Performance Standards (PSs). IFC PS 1 to 4 are triggered in the current portfolio. IFC PS 5 – 8 are not triggered in the current Winch Energy portfolio. The project portfolio does not involve any involuntary resettlement or economic displacement (PS5), there are no impacts on areas of conservation concern (PS6), no indigenous peoples as defined by IFC PS7 and no disturbance to cultural heritage (PS8). Although at this stage PS 5 to 8 are not, the designation of category B+ is based on the potential of these being triggered in the future mini-grid portfolio.
- Region
- Africa
- Country
- Africa
- Sector
- Energy
- Publication date
- 2/8/2021
- Effective date
- 9/17/2021
- Total FMO financing
- USD 2.10 MLN
- Funding
- AEF-I
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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+