GuarantCo provides MGA 36.9 billion (c. USD 9.3 million) partial credit guarantee to GreenYellow to support the debt funding of an operational solar plant and accelerate new green energy investments in Madagascar

  • Date written
  • October, 2020

  • First GuarantCo transaction in Madagascar (OECD DAC1 country)
  • Affordable access to electricity and acceleration of new solar projects to help Madagascar reach its objective to have 80 percent of renewable energy in its energy mix by 2030
  • African Guarantee Fund provided a co-guarantee for MGA 14.8 billion (c. USD 3.8 million)

GuarantCo provides MGA 36.9 billion

GuarantCo, a Private Infrastructure Development Group (PIDG) company, provided developer GreenYellow, a company owned by GreenYellow SAS and Axian Energy, with a guarantee of 36.9 billion MGA (Malagasy Aviary), circa USD 9.3 million.

The guarantee supports debt funding for the operational Ambatolampy solar plant developed by GreenYellow, a 20MW solar power plant which was the first solar plant in Madagascar. The credit enhancement will also enable GreenYellow to accelerate investments in new greenfield projects that could contribute to Madagascar reaching its objective of an 80 percent renewable energy mix by 2030 and improving its energy security. Africa Guarantee Fund, supported by GuarantCo with a USD 50 million portfolio guarantee facility in 2016, provided a co-guarantee for MGA 14.8 billion (c. USD 3.8 million).

GuarantCo’s guarantee will help provide access to affordable clean energy to households and companies, create local jobs and stimulate wider economic development.  With its ability to mitigate risks and lower the cost of financing, GuarantCo has played an active role in shaping the transaction, leading to additional local capital becoming available through BFV Société Générale Madagascar, Banque de Madagascar et de l’Océan Indien and Banque Nationale d’Investissement Madagascar.

Madagascar’s energy mix is presently dominated by heavy fuel oil and diesel. The government owned vertically integrated utility that operates most of the country’s grid infrastructure requires the involvement of the private sector to address the acute shortage of electricity access. Private developers, such as GreenYellow and Axian Energy, will not only significantly improve access to renewable energy in Madagascar but also offer stability of energy supply which will ultimately support the country to make progress toward achieving the United Nations Sustainable Development Goal 7 (affordable and clean energy). 

Lasitha Perera, CEO at GuarantCo, said:

GuarantCo’s involvement will help to increase private sector activity in the Malagasy renewable energy sector by reducing the high costs of funding, contribute to creating an enabling environment for private, domestic, local currency financing and support project development. The transaction is helping to crowd in three private sector banks to lend to a solar power plant and is playing a major role in building the capacity of these local banks to finance these types of projects which is key for the development of future projects in Madagascar.

Otmane Hajji, CEO at GreenYellow, said:

With this transaction and this new partnership, GreenYellow is reinforcing its strong presence in Madagascar and in the Indian Ocean, where we are already the first producer of clean energy. The refinancing of the Ambatolampy power plant will allow GreenYellow and Axian to go further and finance the development of future renewable energy projects in Madagascar.

Jules Ngankam, CEO of African Guarantee Fund, said:

Renewable energy is among the priority investment sectors of AGF. We are delighted to co-guarantee this power plant with GuarantCo and to ultimately contribute to the achievement of renewable energy mix in Madagascar. Through this partnership, we will increase our mandate in Madagascar, where we have so far unlocked USD 21 million of SME financing and created more than 1,000 jobs.”


Madagascar is an OECD (Organisation for Economic Co-operation and Development) DAC1 country defined by the United Nations as one of the Least Developed Countries (LDCs) in the world. The country is one of the world’s highest priority countries for biodiversity conservation due to its exceptional species richness, high number of unique plant and animal species; and the magnitude of threats facing these ecologically, culturally, and economically valuable resources.


About GuarantCo

GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through PIDG, and the Netherlands, through FMO and PIDG. GuarantCo is rated AA- by Fitch and A1 by Moody’s. GuarantCo’s activities are managed by GuarantCo Management Company which is part of Cardano Development.


About PIDG

The Private Infrastructure Development Group (PIDG) is an innovative infrastructure development and finance organisation which encourages and mobilises private investment in pioneering infrastructure in the frontier markets of sub-Saharan Africa and south and south-east Asia to promote economic development and combat poverty. PIDG delivers its ambition in line with its values of opportunity, accountability, safety, integrity and impact. Since 2002, PIDG has supported 157 infrastructure projects to financial close and provided 209 million people with access to new or improved infrastructure. PIDG is funded by six governments (the United Kingdom, the Netherlands, Switzerland, Australia, Sweden, Germany) and the IFC.


About GreenYellow

In 13 years, GreenYellow has become a major energy player in France and abroad and a real ally for companies and local authorities. An expert in photovoltaic production, energy efficiency solutions and energy services, GreenYellow offers its clients a cross-cutting platform of solutions across the entire energy value chain to make their energy transition a beneficial and committed reality.
The company currently has over 250MW of installed powerplants and operates more than 2,500 energy performance contracts worldwide.


About African Guarantee Fund

African Guarantee Fund (AGF) is a non-bank financial institution whose objective is to promote economic development, increase employment and reduce poverty in Africa by providing financial institutions with guarantee products and capacity development assistance specifically intended to support SMEs in Africa. AGF was founded by the government of Denmark through the Danish International Development Agency (DANIDA), the government of Spain through the Spanish Agency for International Cooperation and Development (AECID) and the African Development Bank (AfDB). Other shareholders include: French Development Agency (AFD), Nordic Development Fund (NDF), Investment Fund for Developing Countries (IFU) and KfW Development Bank (KfW). AGF has a rating of AA- by Fitch.