Project detail - Zembo SAS

Who is our prospective customer?

Zembo SAS (the “Borrower”, “Zembo”, the “Company”), a holding company established in France, sells electric motorbikes (“E-boda bodas”) in Uganda through a fully-owned subsidiary, Zembo Motorcycles SMC Ltd (“Zembo UG”). The Borrower was founded by Etienne Saint-Sernin and Daniel Dreher in 2018 who were later joined by James Obarowski, the current CEO. Zembo sells electric motorcycles to drivers, either directly or through third parties, and provides drivers with a battery swap (battery-as-a-service, “BaaS”) solution through a network of 29 battery-swap stations, where drivers swap discharged batteries for fully charged batteries and pay for the energy consumed. Zembo has 75 employees principally in the main operational offices in Uganda, including employees across its battery-swap station network.

What is our funding objective?

FMO will provide an equivalent loan of up to EUR 1mln to the Borrower (the "FMO Loan"). The FMO Loan to Zembo will finance the acquisition of batteries and chargers (the “Project”), while the acquisition of the corresponding motorcycles will primarily be financed by other financing solutions. The increasing capex requirement associated with the sale of the e-boda bodas warrants a scalable and milestone-based pilot debt facility.

Why do we want to fund this investment?

E- boda bodas target lack of access to affordable public transport and are key to reduce pollution, congestion, and noise from significant urbanization and population growth in Uganda. The FMO Loan will enable affordable e-boda bodas to be provided to the Ugandan market and is fully aligned with FMO strategy. The FMO Loan will fund affordable non-polluting transport: even with a higher up-front cost, and assuming no residual value, e-boda bodas are estimated to be cheaper compared to an Internal Combustion Engine Boda boda (“ICE”) due to fuel and maintenance savings.

What is the Environmental and Social categorization rationale?

The investment is categorized as B due to limited environmental and social ("E&S") risks and impact. The key risks relate to health and safety (primarily of e-boda boda drivers) and pollution prevention (primarily battery waste). Zembo provides safety equipment to its e-boda boda drivers, and health and safety ("H&S") trainings. As ownership of the batteries is retained by Zembo under their swapping model, the second-life and end-of-life applications remain under direct company management to ensure safe battery recycling. As part of the reporting requirements, Zembo will be required to report on E&S (primarily H&S) and impact indicators, in line with current reporting requirements from investors.