Project detail - Zembo SAS

Who is our customer?

Zembo SAS (the “Borrower”, “Zembo”, or the “Company”), a holding company established in France and founded in 2018, sells electric motorbikes (“E-boda bodas”) in Uganda through its wholly owned subsidiary, Zembo Motorcycles SMC Ltd (“Zembo UG”). Zembo sells electric motorcycles to drivers, either directly or through third parties, and provides a battery swap (battery-as-a-service, “BaaS”) solution through a network of 29 battery-swap stations. At these stations, drivers exchange discharged batteries for fully-charged batteries and pay for the energy consumed. Zembo has 75 employees, primarily in the main operational offices in Uganda, including staff across its battery-swap station network.

What is our funding objective?

FMO provides a loan equivalent of up to USD 1 million to the Borrower (the "FMO Loan"). The FMO Loan finances the acquisition of batteries and chargers (the “Project”), while the acquisition of the corresponding motorcycles is primarily financed through other financing solutions. The increasing capital expenditure requirement associated with the sale of the E-boda bodas warrant a scalable and milestone-based pilot debt facility. This transaction qualifies as 100% Green and Reducing Equalities.

Why do we fund this investment?

E-boda bodas address the lack of access to affordable public transport and are key to reducing pollution, congestion, and noise resulting from significant urbanization and population growth in Uganda. The FMO Loan enables the provision of affordable E-boda bodas to the Ugandan market and is fully aligned with FMO's strategy. The FMO Loan supports affordable, non-polluting transport. Even with a higher upfront cost, and assuming no residual value, E-boda bodas are estimated to be more cost-effective than Internal Combustion Engine boda bodas (“ICEs”) due to fuel and maintenance savings.

What is the Environmental and Social categorization rationale?

The investment is categorized as B due to limited environmental and social ("E&S") risks and impacts. Key risks relate to health and safety (primarily of E-boda boda drivers) and pollution prevention (primarily battery waste). Zembo provides safety equipment and health and safety ("H&S") training to its drivers. As Zembo retains ownership of the batteries under its swapping model, the second-life and end-of-life applications remain under direct company management to ensure safe battery recycling. As part of its reporting obligations, Zembo is required to report on E&S (primarily H&S) and impact indicators, in line with current investor reporting requirements.