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Chad

Alternaprod Tchad SAS

$2.9 million
Renewable Energy
Summary of Proposed Guarantee
Proposed
Chad

Project Facts

Project Facts
Project ID
15804
Strategic Priority Area
IDA
Fragile & conflict-affected states
Energy efficiency and climate change
Guarantee Holder
Finlux-Ellen SARL
Investor Country
Luxembourg
Environmental Category
B
Date SPG Disclosed
June 06, 2019
Projected Board Date
August 29, 2019
Project Type
SIP
Fiscal Year
2019

Project description

This summary covers an application by Finlux-Ellen SARL (FINLUX) of Luxembourg for its equity and shareholder loan investments in Alternaprod Tchad SAS (Alternaprod or the Project Enterprise) in Chad. The investor seeks cover for up to €2.6 million (or approximately US$2.9 million)against the risk of war and civil disturbance for a guarantee period of up to 15 years.

 

The project consists of the storage of E-Longlife solar PV power kits with lithium-storage batteries of various capacities (Solar Kits) and high energy efficiency productive tools and appliances (Solar tools and solar appliances) in the Project Enterprise’s warehouse located in N’Djamena, transportation of Solar Kits, solar tools and solar appliances to the end users’ sites, and installation, operation, and maintenance of Solar Kits, tools and appliances in the end users’ sites. The end users’ sites will be located in the Bongor, Kelo, Lai, Massakory, and Moussoro regions of Chad (phase 1 of the project), and the entire territory of Chad not served by the national grid (phase 2 of the project). Solar Kits store energy collected by photovoltaic panels to power solar tools and solar appliances for domestic and productive use in exchange for a rental price determined by subscription contracts between the end-users and the Project Enterprise. Solar Kits are provided by Bren-Tronics, Inc. of the USA through its French subsidiary Bren-Tronics International Solution SARL, and are owned by FINLUX and/or Alternaprod. The electricity generated is used for household consumption and for SMEs in rural areas of Chad that do not have access to the grid.

 

Environmental Categorization

 

The project is a Category B under MIGA’s Policy on Environmental and Social Sustainability

 since it is expected to have limited environmental and social impacts which are site-specific, largely reversible, and can be readily addressed through mitigation measures. The key environmental and social issues associated with this project include: environmental and social management systems; occupational and community health & safety; waste management; and environmental health and safety issues associated with the supply chain. These impacts can be avoided or mitigated by adhering to MIGA’s Performance Standards, and the World Bank Group (WBG) General EHS Guidelines.

 

The project has environmental and social procedures in place, which will be updated to manage the potential risks and impacts consistent with MIGA’s Performance Standards. The project will also appoint an Environmental, Health, and Safety Officer with responsibility for the implementation of environmental and social risk management measures. 

 

The Environmental and Social Action Plan for the project is available here (link).

 

Development Impact

 

Electricity access in Chad is among the lowest in Sub-Saharan Africa, and approximately 95% of the rural population does not have access. Chad’s large territory and low population density makes it challenging to deliver power through a national grid. Mini-grid and off-grid solutions are therefore important for adequate service delivery. The distribution of solar kits has the potential to increase economic activity by small and medium enterprises and improve quality of life for households in remote areas of Chad. The project is expected to provide affordable energy for approximately 30,000 households. The kits being deployed have a 20-year lifespan and a low carbon footprint, representing a sustainable solution to the challenge of power availability.

 

MIGA’s support for the project is expected to enable critical investment in a fragile and conflict-affected state and an IDA country, as well as contribute to climate change mitigation, all of which are strategic priorities for MIGA.