On August 30th 2024, the Facility for Energy Inclusion (“FEI”) and Cicada signed finance documents to provide USD 10 million of long-term senior debt to Cicada Solar Limited (“Cicada Solar”). This financing will enable the company to continue to grow its business providing renewable energy solutions and vendor financing for credible businesses in Zimbabwe.
Cicada Solar is a leading provider of solar and solar hybrid C&I solutions in Zimbabwe. By deploying and financing renewable energy solutions, Cicada Solar enables businesses to access a more affordable and reliable source of energy. With strong local expertise and a long-term commitment to the market, Cicada Solar has a competitive advantage in the market, allowing it to prioritise clients’ needs effectively.
“Further demonstrating its leading role in the C&I sector in Africa, the Facility for Energy Inclusion has been able to leverage its experience to deliver this milestone transaction in Zimbabwe. This achievement highlights the Fund’s capability to invest in frontier markets with limited access to long-term infrastructure financing, such as Zimbabwe. We look forward to continuing to support Cicada Solar as it scales up.”, said Carmen de Castro, Managing Director and FEI Fund Lead at Cygnum Capital.
“We are delighted to conclude this long-term facility with FEI, which will enhance our drive to reduce the cost of energy for our commercial and industrial clients. Zimbabwe’s current growth trajectory needs to be underpinned by sustainable and affordable power and Cicada Solar intends to play a meaningful role in this area. To have FEI, with its sizeable funder base, together with our local funding partner, NMB Bank, join forces with us is most encouraging.”, said Jonathan Wood, Managing Director at Cicada Solar.
FEI is managed by Cygnum Capital and was advised by Burges Salmon (legal), Afry (technical) and IBIS Environmental Social Consulting Europe (E&S) on this transaction.
About Cicada Solar
Cicada Solar provides a holistic energy solution in scoping, building, maintaining and operating solar PV and battery storage projects, together with providing customers with flexible financing solutions. Cicada Solar is part of Cicada Holdings, one of Zimbabwe’s largest diversified agricultural and green-economy businesses. The group encompasses investments in forestry and timber processing, avocado, macadamia and banana estates, row crop production, renewable energy and carbon project development. The group manages extensive land assets across Zimbabwe and does so with a focus on long term sustainability. Cicada’s carbon businesses are a complementary platform to drive ecosystem restoration, conservation and carbon offset initiatives. Cicada Solar is leveraging the group’s experience as a commercial energy user to improve delivery of this vital resource and supplement the efforts of the national power utility.
About Cygnum Capital
Cygnum Capital Group is an investment bank and asset manager, operating across frontier and emerging markets. Cygnum Capital Asset Management manages six pioneering funds: four debt funds including: (i) the African Local Currency Bond Fund (“ALCBF”), aground-breaking investment vehicle established to support local currency capital markets, (ii) Off-Grid Energy Access Fund (“OGEF”) which supports companies in off-grid energy such as SHS and small- medium mini-grids, (iii)FEI which support companies that provide a range of renewable energy solutions such as medium-large mini- grids, C&I and IPP with a maximum capacity of 25MW, (iv) AfricaGoGreen Fund (“AGG”) which supports companies combating climate change by reducing the use of fossil fuels through new technologies and that increase energy efficiency and promote economic development in high impact target sectors; and (v) Africa Agricultural Trade Investment Fund (“AATIF”) which invests in the African agricultural sector promoting primary agricultural production, value addition through local processing and increased international trade integration; and a VC private equity fund (vi) E3 Low Carbon Economy Fund for Africa (“E3 LCEF”) which invests in climate-smart services, digital connectivity & applications, low-carbon productivity enablers. Cygnum Capital Asset Management has over USD1.1 billion in assets under management with investments in 32 African countries.
https://www.cygnumcapital.com
About the Facility for Energy Inclusion
FEI is designed to support small-scale independent power producers delivering power to the grid, mini-grids, commercial and industrial and captive power projects. FEI was set up by the African Development Bank (“AfDB”) as part of its New Deal for Africa initiative. In addition to the investment by the AfDB, FEI received equity funding from the German Federal Ministry for Economic Cooperation and Development through KfW and Norfund and loan commitments from the Austrian Development Bank and the International Finance Corporation (“IFC”). The AfDB also invested on behalf of the Clean Technology Fund and the European Commission.
The transaction was supported by FEI’s Project Preparation Facility (“PPF”), funded by the Global Environment Facility, through the AfDB. The PPF through its due diligence costs window provides returnable grant funding for last-mile processes crucial to closing transactions and to fund due diligence and preparatory costs incurred in establishing innovative structures or transactions that FEI seeks to lend to. The transaction benefited from the PPF’s blended finance window, which provides concessional reimbursable grants to support (i) renewable energy projects in transition states and fragile contexts and (ii) mini-grids projects.
