Project detail - Sima Off-Grid Solar and Financial Access Senior Debt Fund I B.V.

Who is our customer

SIMA Off-grid Solar & Financial Access Senior Debt Fund is managed by Social Investment Managers & Advisors (“SIMA”), a first-time fund manager. The fund focuses on SSA (~70%) and Asia (~30%), and provides debt financing to companies in solar energy access (60%-70%) and financial access (30%-40%).

What is our funding objective?

i) Solar energy access (60-70%): financing inventory and working capital for off-grid companies, including portable solar lights and solar home systems, and their distributors. ii) Financial access (30-40%): micro finance institutions, which provide access for financing to end consumers for the purchase or leasing of energy products.

Why do we fund this investment?

The fund will invest in off-grid solutions such as solar-home-systems. The key area of growth for these products are rural populations with no connectivity to grid electricity. Providing these communities with (renewable) energy is a crucial step in the development of these communities. The same holds for the microfinance entities in which the fund will invest, who will provide funding to small scale rural entrepreneurs.

What is the Environmental and Social categorization rationale?

As it concerns a fund, all PS could be triggered depending on the investee companies. This is a Category B project due to the limited E&S risks associated with the fund’s portfolio that focuses on small and medium companies providing off grid solar market solutions - such as solar lights and larger home solar systems to consumers’. The fund also focuses on microfinance institutions. E&S health and safety in supply chain provides a potential albeit low risk. SIMA has an ESG policy in place that was recently updated. SIMA ESG policy prohibits them to invest in E&S category A projects. As part of SIMA’s process, SIMA request ESG audits from borrowers and when needed hires external consultants to cover environmental health and safety issues relevant for the supply chain of off-grid solar industry’ as well as labor and working conditions, portfolio companies’ governance, employment and human resource policies for compliance with occupational health and safety, and other applicable labor laws and requirements are assessed. SIMA will work to ensure that solar companies receiving SIMA’s support are environmentally and socially sustainable. Where deemed applicable, SIMA encourages their clients to integrate the three R’s” of waste management (recycle, reuse, reduce) into their businesses and report on their waste management practices.

More investments

Date	Total FMO financing
2/28/2023	USD 3.00 MLN