TANZANIA– Private equity fund FMO and Symbiotics, a leading investment firm specialized in emerging, sustainable and inclusive finance, have announced a US$32.5mn facility for ZOLA Electric(ZOLA) to finance the growth of the company’s Tanzania operations over the next 5 years.

FMO is the lead arranger in the financing package that will grow ZOLA Electric’s service delivery in Tanzania, helping an additional 145,500 households who do not have access to a reliable and affordable grid. 

The FMO-arranged senior loan will consist of US$5 million from the Access to Energy Fund (AEF), US$12.5 million from FMO-A and US$15 million from Symbiotics. 

ZOLA currently powers more than 1,000,000 customers across 5 countries and employs more than 1,000 people.

The investment is also expected to create around 2,100 new jobs in off-grid solar. 

“We are excited to announce this new investment from FMO and Symbiotics. It will allow us to connect more people in Tanzania, support the communities in which we operate and continue the development of our industry-leading power systems,” said Bill Lenihan, Co-CEO, ZOLA Electric.

The FMO-arranged senior loan will consist of US$5 million from the Access to Energy Fund (AEF), which have catalysed the investment of US$12.5 million from FMO-A and US$15 million from Symbiotics. The tenor of the loan is five years. 

According to FMO, 2.2 billion people still don’t have access to reliable or affordable energy around the world.

ZOLA Electric and other energy access companies play a critical role in delivering clean, affordable, reliable energy without the need for grid infrastructure. 

Despite the rapid growth of ZOLA Electric’s sector, there is still significant unmet need and untapped potential. There is growing recognition of the potential for distributed renewable energy to disrupt power supply and the sector is attracting significant investment interest.

“ZOLA’s technologically advanced product offering and innovative business model have attracted an incredible group of strategic and capital partners. FMO and Symbiotics join a roster of strategic and capital partners that is the strongest in the industry, including Tesla, Total, EDF, DBL Partners, Helios Investment Partners, GE Ventures and SunFunder,” said Chris Wurdemann, Vice President of Corporate Finance, ZOLA Electric. 

“The off-grid sector is developing fast and receiving increased attention from investors but is still perceived as high risk; few players have reached profitability. ZOLA Electric Tanzania has a dedicated and professional management team and is well on the way on its path towards profitability. This transaction fits FMO’s inclusive business and green strategy as well as the core theme in the strategy of the Access to Energy Fund: providing access to energy for the unreached rural communities,” said Rosemarijn van der Meij, Fund manager of the Access to Energy Fund (AEF), managed by FMO.

On top of the current financing, FMO provided technical assistance to ZOLA, to put a credit scoring system in place.