The project will provide improved electricity access to around 285,000 people supporting SDG 7 and reduce emissions by 34,000 tonnes of CO2 through the displacement of thermal power supporting SDG 13. Only 15 percent of the population have access to electricity with considerable disparity between urban (79 percent) and rural (8 percent) areas.
GuarantCo has been the first company to mobilise local currency from commercial banks for utility scale solar projects in Madagascar. Through demonstration and replication, this is expected to enhance the resilience of the power sector by diversifying away from thermal power, reducing the cost of generation and improving the sustainability of the state-owned electric utility and water company in Madagascar.
This is GuarantCo and AGF’s second transaction with GreenYellow. In October 2020, GuarantCo provided a MGA 36.9 billion (USD 9.3 million) guarantee and AGF a guarantee of MGA 14.8 billion (c. USD 3.8 million) to refinance the operational 20 MW Ambatolampy solar power plant, the first grid connected and largest solar plant in Madagascar. This 20 MW power / 5 MW battery extension is testimony to the replicability of such projects and the viability of local currency financing for solar plants in Madagascar.
GuarantCo has played an active role in shaping the transaction with its ability to mitigate risks and lower the cost of financing. This has led to additional local capital becoming available through BFV Société Générale Madagasikara and Banque Nationale d’Investissement Madagascar.
Layth Al-Falaki, CEO of GuarantCo, said: