Project detail - Nithio FI B.V.

Who is our customer

Nithio FI B.V. (“Nithio”) is an open-end debt fund, managed by Nithio Finance Inc. The Fund is operational since 2021 and finances energy access companies in Sub-Saharan Africa (primarily PAYGO solar). Nithio uses a machine learning based tool to standardize credit risk assessment by predicting credit risk at household level, allowing it to finance smaller (locally owned) borrowers in an efficient manner.

What is our funding objective?

FMO will invest USD10mln from the Access to Energy Fund into the Fund’s senior debt layer. Upon FMO’s entry the total vehicle is expected to have raised around USD50mln, with further funds envisaged to be added in subsequent years. FMO’s funding will be invested into multiple energy access companies.

Why do we fund this investment?

Lack of energy and financial access to the Bottom of the Pyramid (BoP) and businesses continues to hold back social and economic development in (particularly) SSA. The Fund is highly aligned with FMO’s strategy to support initiatives relating to distributed energy. The investment is expected to have a positive economic, social and environmental impact. FMO’s Green and Reducing Inequality labels apply (100%), given Nithio’s inclusive and green activities.

What is the Environmental and Social categorization rationale?

This transaction is labelled as E&S risk category B, similar to the classification of other off-grid and renewable energy debt funds in FMO’s portfolio. The fund focuses primarily on companies providing Access to Energy to the Bottom of the Pyramid. While these generally have a low risk profile, activities do come with potential limited adverse risks associated with waste management and labour conditions. The following Performance Standards are triggered by the transaction: PS 1 Assessment and Management of Environmental and Social Risks and Impacts, PS 2 Labor and Working Condition, PS 3 Resource Efficiency and Pollution Prevention, PS 4 Community Health, Safety and Security. PS 5 is not triggered as there is no land acquisition (corporate facility). PS 6 is not triggered as no Biodiversity Conservation and Sustainable Management of Living Natural Resources were identified. PS 7 is not triggered because no impacts on local groups qualifying as Indigenous were identified. PS 8 is not triggered as no cultural objects or places were identified.