responsAbility Investments, a Zurich-headquartered development asset manager, has struck what’s described as an eight-figure debt deal with Mobisol, the provider of off-grid solar home systems. The transaction involves the establishment of a special purpose debt vehicle which will be known by the acronym MOOVE, (Mobisol Off-Grid Financing Vehicle), which will be backed by two of reponsAbility’s energy funds.
Mobisol will use the vehicle to support its growth in Tanzania, tapping it to provide financing for the electrification of over 15,000 households and small businesses. The new debt financing structure involves special purpose vehicles that ring-fence receivables from specific Mobisol customers exclusively for responsAbility-managed funds. Having removed complicated intercreditor agreements typical in on-balance sheet lending, the new structure allows Mobisol to offer customized debt financing solutions to future lenders.
“Mobisol is proud to have partnered with responsAbility in order to devise MOOVE,…”said Hartmut Schuening, Mobisol’s CFO. “We believe the mechanics will make a significant contribution to the growth of the pay-as-you-go sector as a whole.”
According to a company representative, the new structure is already exciting interest from a varied group of investors including impact investors, family offices and DFIs which bodes well for ease of access to debt capital. At an aggregate level, it’s felt that MOOVE could help structure a completely new asset class in the pay-as-you-go universe, attracting a new set of commercial and institutional investors who are keen to invest in simple and secure investment vehicle structures.
The structure, which is infinitely scalable, was developed by Mobisol with the support of responsAbility. The firm sells solar home systems to low-income households in Africa and has already established itself in the Tanzanian and Rwandan markets. The company sells its products under a three-year payment plan, with entry-level systems costing approximately the same as its typical customer would spend on kerosene, candles, batteries and mobile phone charging services. As well as making the systems affordable, in a significant number of cases, Mobisol’s customers are able to generate an income from their solar home system, selling electricity on to others.
In October last year, Investec Asset Management made a significant equity investment in the firm to help accelerate its expansion plans. At the time it was reported that Mobisol had installed more than 60,000 systems. In July, the firm acquired Lumeter, a pay-as-you-go software company based in Nairobi.