Last update: 28 February 2017
Submitting an Investment Proposal
ElectriFI is not in a position to accept Investment Proposals outside the Call for Proposals.
Information about the second Call for Investment Proposals can be found here. The online application form will be open from 8 February - 8 March 2017.
ElectriFI’s Application Form will remain in English only. However, the responses may be filled out in French.
The selected companies / projects from our first Call for Investment Proposals are in various stages of approval and due diligence. We will showcase our investments on our website after financing contracts have been signed.
When a Call for Proposals is open, you will be able to print or download your Application Form, both before and after having completed and submitted the form. Not yet submitted the form? Then you can find this option when you enter ‘Create new project’. Submitted your form already? Then you can find this option in ‘My projects’.
Yes, maximum 2 applications per applicant.
Information about the second Call for Investment Proposals can be found here.
ESG: Environmental, Social and Governance; PPA: Power Purchase Agreement; ESIA: Environmental and Social Impact Assessment; IRR: Internal Rate of Return; IFI: International Financial Institution; DFI: Development Financial Institution; COGS: Cost Of Goods Sold.
All renewable technologies (excluding first generation biofuels) are eligible. Combining renewable with non-renewable generation can be considered in exceptional cases if indispensable for the stability of the system.
Solar Home Systems wholesalers and retailers are eligible. Important considerations will be the business expansion plan for underserved off-grid areas and the generation capacity (Wp) of the systems.
CPP is eligible as long as it matches ElectriFI’s investment criteria.
ElectriFI may considering funding hybrid projects (i.e. those employing both renewable and conventional power generation) only when a 100% renewable solution would not adequately meet end-user needs or to balance the system.
Improved access to sustainable energy is certainly eligible; however, new connections to electricity are an essential objective of ElectriFI and would therefore be prefered.
ElectriFI only considers projects or businesses that have at least entered the active development stage. In some cases, ElectriFI will act as a co-developer and provide development finance to facilitate financial close of a Project. The amount of development finance invested will be converted into ElectriFI investment (or reimbursed, with a premium, to ElectriFI) at financial close.
The primary objective of ElectriFI is the creation of new electricity connections. Even though alternative activities that provide access to cleaner and more efficient energy use to end-users are eligible, biogas and other technologies solely for clean cooking are not in line with ElectriFI’s investment strategy.
It is important to explain how ElectriFI is additional to other financiers: there may be sufficient interest from DFIs and commercial banks. A clear role for ElectriFI, for example taking a higher risk position, should be evident.
As stated in the Investment Guidelines, for companies with more than 3 years of operations, we require at least 3 years of historical financial data. However, younger companies are also eligible, provided they comply with the selection criteria, supply all available historical financial data, and are at least in the “Active Development” stage (see below under ‘Investment Process’).
Yes, as long as the investments are made (i.e. the project operates) in a country that is on the eligible country list.
The main actor to be targeted is the private sector. Companies that are partly publicly owned can apply.
ElectriFI will only invest in companies / projects where the main sponsors invest themselves. The Sponsors can be any of the above. Applicants have to provide a clear and detailed breakdown of their current and foreseen equity positions.
This depends on the sources of funding. Negotiations can be in early stages, but a strong business case must then be made to show how ElectriFI’s investment is instrumental and sufficient to bring the project forward.
The main measure for impact is the number of directly attributable new electricity connections, with a minimum of 1000. Other important considerations are (not limited to) the capacity installed, number of jobs created, leveraged capital, and greenhouse gas emissions saved.
For IPP projects, we will look at the project’s impact on electrification (how your project will create new connections to electricity) which will be compared to other applications within the IPP business model category.
For on grid projects, we will look at the project’s impact on increased end-user access to reliable, sustainable energy. We will consider the rationale in the specific local context, looking at capacity, suppressed demand, and wider developmental impact.
Financial viability has to be demonstrated. Depending on the degree of certainty and reliability of the revenues, the business model may be considered appropriate or not. This is highly dependent on local context and can therefore not be determined upfront for all cases.
If the PPA allows for a fixed price that enables the Sponsor to be/become financially sustainable, the end-client subsidization by a national electricity company will not directly lead to non-eligibility.
ElectriFI does not provide grant funding, concessional loans, or other low-cost capital. Our investments are generally high risk for which corresponding financial returns in line with local commercial markets are expected. ElectriFI will choose financing instruments that are appropriate to the venture's needs, and can include project development finance, debt, quasi-equity or, to a certain extent, equity and guarantees. All funding should be considered temporary in nature - with a maximum term of funding of 7-8 years -. ElectriFI must be additional to other investors - we will not compete with commercial banks or funds. ElectriFI assumes a significant level of risk, but seeks alignment with other investors and expects a commensurate return. ElectriFI is flexible in structuring its financing instruments and repayments, matching the expected cash flows of the project. These will - possibly - be linked to the success of the venture. Starting point is always the business case of the client and the financing need that brings.
The maximum amount of financing is EUR 10 million (or its USD or local currency equivalent). For the first Call for Proposals, a ceiling per investment was set at EUR 5 million (or its USD or local currency equivalent).
The minimum size of ElectriFI investment is EUR 500,000. It is required to provide a platform in which ElectriFI can invest a significant amount of funding, which is a prerequisite for the fund management structure by a team based out of Brussels.
ElectriFI was not designed to become a majority shareholder in any venture. Therefore, ElectriFI will not provide more than 50% of the equity tranche in any venture. On the debt side, we mainly foresee to provide the junior / unsecured / local currency / flexible debts. In those cases, ElectriFI will assess the broader picture, including the potential for senior funding to come in alongside ElectriFI's junior debt, either at the same time or later. The debt finance part of any venture can (often) exceed the equity amount invested by shareholders. Therefore, in specific cases, ElectriFI's EUR contribution to debt financing part of any venture can be higher than 50% of the equity amount in that venture.
ElectriFI investment is usually unsecured. However, the need for guarantees will depend on the project risks and contractual structure of the transaction.
Funding will be provided in line with market rates. Due to its inherent structure, ElectriFI funding will be able to assume a high level of risk, and offer flexibility in payments of interest and principal: these will - possibly - be linked to the success of the venture. ElectriFI funding cannot be applied to artificially increase the returns to the investors, nor to decrease the price for the end clients. It can be applied to take a higher risk or come in earlier stage than other development or commercial funders.
Yes, though ElectriFI must be additional to other investors.
When feasible, ElectriFI does consider local currency investment. Though, please bear in mind the usual hedging cost attached to such operations.
From a project life-cycle perspective, ElectriFI funding will be made available to eligible projects that have reached the "Active Development" stage. This is usually the point when most of the following have been achieved:
- market analysis and validation are finalised,
- if applicable pilot has been undertaken,
- land is secured,
- resource data are acquired,
- feasibility study and environmental impact assessment are completed, and
- a formal understanding with authorities is reached.
The time needed varies from one investment to another, depending on factors such as the information provided and the complexity of the financing instrument.