Off-Grid Market Development Fund is providing subsidies to a dozen companies to deliver solar power in Madagascar. Only 14% of Madagascar’s 25.7 million people (and 5% of rural Malagasy) have access to the electricity grid. The Antananarivo-based fund $40 million fund, backed by the World Bank and government of Madagascar, incentivizes solar distributors to test models to improve affordability for customers, like pay-as-you-go and equipment rentals.
The fund also offers lines of credit to cover consumer financing, working capital and inventory costs.
The 12 companies include: EcoGemat, EDM, HERi Go, HERi Madagascar, Jiro-Ve, Jovena, LR Technologies, Metaplasco, Orange, Telma, Welight and Baobab+, which just raised $4.7 million to expand in Senegal and Côte d’Ivoire.
The 12 companies will collectively receive $2.5 million upfront. They can achieve outcome payments of up to $28 million in 2024 if they distribute 900,000 solar products and home systems, including 30% in high-poverty areas.
Société Générale Madagasikara is providing the up-front capital. Bamboo Capital Partners is managing the fund.