Mobisol and two energy funds managed by responsAbility, a leading asset manager in the field of development investments, have signed an off-balance sheet debt deal. The cooperation will fuel the continued growth of Mobisol in Tanzania and provide financing for electrifying more than 15,000 households and small businesses. The deal is one of the largest special purpose vehicle debt transaction structures in the off-grid solar sector.
The innovative mechanics involve local special purpose vehicles (SPVs) that ring-fence receivables from specific Mobisol customers exclusively for the responsAbility-managed funds. The structure has been labelled MOOVE (MObisol Off-grid financing VEhicle).
Complicated intercreditor agreements that typically make on-balance sheet lending cumbersome are thereby avoided and Mobisol is now in a position to offer tailor-made debt financing solutions for future lenders. At the same time MOOVE is infinitely scalable, can easily be replicated in Tanzania and other countries and reduces transaction costs.
“Mobisol is proud to have partnered with responsAbility in order to devise MOOVE, a groundbreaking new financing structure for debt financing. We believe the mechanics will make a significant contribution to the growth of the PAYG sector as a whole.” – Hartmut Schuening, CFO Mobisol
Stefan Issler, Head of Energy Debt Financing – Direct Investments at responsAbility Investments, noted that “Through its pay-as-you-go business model Mobisol provides underserved Tanzanian households and businesses with affordable and reliable off-grid electricity supply – an important prerequisite for further economic growth and development in the country. We are pleased to be able to provide easy-to-access financing for the further development of this impactful business.”
This financing mechanism is already attracting interest from further lenders and should greatly ease access to debt capital.
At the aggregate level, MOOVE will be able to help structure what could become a completely new asset class in the pay- as-you-go (PAYG) universe, thereby attracting a new range of commercial and institutional investors who have been waiting for an easy and secure investment vehicle.