Green solar bonds created by Social Investment Managers and Advisors (SIMA) and the International Finance Corporation (IFC) are being subscribed to by a number of influential figures in the finance industry. Sub-Saharan Africa will receive the first $150 million closing to support solar energy projects that are productive.
Productive solar energy is being included into the growing green bond market. The World Bank Group's private sector finance arm, the International Finance Corporation (IFC), and Social Investment Managers and Advisors (SIMA), have just successfully completed a new deal. $150 million in financing was registered at the issue's initial financial closure. IFC underwrote $45 million of this deal, which included a $25 million loan and $11 million in subordinated loans under the Finland-IFC blended climate finance program.
With $9 million, the Global Energy Alliance for People and Planet (GEAPP) is supporting the agreement. The remaining $131 million in financing is being supplied by loans from the following organizations: the Shell Foundation, the Schmidt Family Foundation, the German Development Agency (KfW) subsidiary, the Belgian Investment Company for Developing Countries (BIO), the Austrian Development Bank (OeEB), the German Investment and Development Company (DEG), the Belgian International Development Finance Corporation (DFC), and the Financing Company for Developing Countries (FMO).
According to the IFC, the proceeds from the bonds "will finance one of the largest impact funds focused exclusively on the development of the rooftop solar energy sector in Africa, with an emphasis on small and medium-sized enterprises, which are harder to reach." To help small and medium-sized local developers expand, the fund will specifically provide short-term corporate funding and project finance of up to 10 years for individual projects of less than 5 MW.
As per the World Bank Group's private sector lending arm, the fund will prioritize areas such as manufacturing, services, education, healthcare, and agribusiness. Around 220 MW of solar energy and electricity storage projects are anticipated to be financed by this first solar green bond issue, which is being conducted under the collaboration between IFC and EIHWC.
In addition to improving value chains and producing energy savings, the financed solar projects will, over the course of their lifetime, cut CO2 emissions and the consumption of fossil fuels by about 4 million tonnes, according to GEAPP.