GuarantCo provided GreenYellow, a company owned by GreenYellow SAS and Axian Energy, with a guarantee of MGA (Malagasy Aviary) 36.9 billion, circa USD 9.3 million
GuarantCo’s first guarantee in Madagascar supports and crowds in local bank debt funding for the operational Ambatolampy solar plant developed by Green Yellow, a 20MW solar power plant which was the first grid connected solar plant in the country.
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 through a USD 50 million portfolio guarantee facility in 2016, provided a co-guarantee for MGA 14.8 billion (c. USD 3.8 million).
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.
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).
The Ambatolampy solar power plant is a major contributor to the reduction of carbon emissions in Madagascar, reducing emissions by 17,000 tons of CO2 per year.
GuarantCo’s guarantee will help provide access to affordable clean energy to households and companies, create local jobs and stimulate wider economic development.