Summary sheet
The project will finance the deployment of solar home systems in Benin. The solar home systems are composed of a solar panel, a central unit (including battery storage, an energy management system / charge controller and communication technology) and several appliances and will be sold on a payment plan basis to individual beneficiaries located in Benin under pay-as-you-go contracts.
The operation aims at facilitating access to energy for households and micro-entrepreneurs in Benin by financing the design, production, distribution, installation and payment plans of about 107 000 Solar Home Systems. These Solar Home Systems provide basic, clean energy services, such as lighting and phone charging to households without grid access, who otherwise have to rely on inferior and more expensive alternatives. The operation is expected to significantly improve the living conditions of the final beneficiaries and thereby generate high development impact
The EIB financing will support the Promoter in providing clean and sustainable energy to currently un-electrified households in Benin, replacing the use of polluting fossil fuel alternatives. The operation thereby contributes to Climate Action, Environmental Sustainability and sustainable economic development goals and is therefore aligned with the current and upcoming National Indicate Programme, as well as with EIB lending priority objectives.
Such clean energy solutions, as financed by this project, suffer from market failures linked to the non-internalisation of the climate, environmental, and health benefits from sustainable energy solutions, which inhibit a stronger uptake of solar home systems and result in an overuse of polluting fossil fuel alternatives.
SHS companies suffer from financing constraints due to the relative novelty of this business model and the credit risk from providing payment plans to low-income clients without formal employment. The resulting difficulty to raise funding restrains the possibility of companies to offer the PAYGo (lease-to-own schemes) which are critical for the affordability of SHS.
EIB financing enables the Promoter to finance the growth of their business and offer affordable rates to end customers. It is expected that the operation will create a very high social benefit, by providing clean and reliable electricity and replacing polluting and harmful off-grid alternatives. The promoter has a solid governance system in place which appears well suited for the governance risks of the promoter's business environment.
The operation is expected to have overall significant positive environmental and social impact by providing clean energy to households that are currently un-served or under-served by the grid and mostly reliant on polluting and dangerous energy sources. Limited negative environmental impacts could arise from health and safety issues related to the inappropriate handling of batteries (notably at the time of disposal) and disposal of old devices (e.g. kerosene lanterns, candles, flashlights and generators for lighting). Considerable e-waste is only expected to arise from the operation in five to seven years and the Promoter is looking into potential e-waste handling schemes in the country/in the region, to ensure the maximisation of the re-use of components, whilst ensuring the appropriate handling of polluting items like batteries.
The Bank will require the Promoter to ensure that implementation of the project will be done in accordance with the Bank's Guide to Procurement.
Disclaimer
Before financing approval by the Board of Directors, and before loan signature, projects are under appraisal and negotiation. The information and data provided on this page are therefore indicative.
They are provided for transparency purposes only and cannot be considered to represent official EIB policy (see also the Explanatory notes).
Documents
News & Stories
Inside the project
How and Why
Transforming access to electricity in West Africa
Why
- Around 600 million people lack access to electricity in sub-Saharan Africa
- In Benin, only 40% of the population has electricity
- Households rely on kerosene for lighting and cell phone charging, which are expensive, polluting and inefficient
- Clean, sustainable energy sources like solar devices and solar home systems are expensive
How
- Pay-as-you-go solution to unlock solar home systems for 20 cents a day
- Customers don’t bear the full cost of the solar systems, such as solar panels and mini grids
- Deployment of 107 000 high-quality solar home systems in Benin
Sectors & Countries
PLAY VIDEO
5:49
More than one million households don’t have access to modern and sustainable energy in Benin alone.
Related media
Solar power for rural Africa
A scaled up off-grid model transforms access to solar power in rural Africa
Crisis to spur green transition
Most Europeans believe a green transition is the best response to the energy price crisis caused by the Russian invasion of Ukraine. The EIB Climate Survey has the numbers
Finance in Africa 2022: Navigating the financial landscape in turbulent times
The European Investment Bank (EIB) has completed its annual survey of banks in Africa in 2022, supported by Making Finance Work for Africa. In Finance in Africa in 2022: Navigating the financial landscape in turbulent times, the seventh report in this series, we surveyed 70 banks in sub-Saharan Africa between April and June 2022 to understand how the war in Ukraine is impacting banks and to learn their views on climate lending, gender lending and the accelerating digitisation of the sector.
Related projects and stories
A home in Malta
Malta is tackling its housing crisis. Malita Investments launches a major social and affordable housing project to address growing demand and make sure people have a sustainable home
Efficiency as a service
How could SMEs secure the upfront investment needed for efficient solutions in order to benefit from lower operating costs and combine decarbonization with higher profit margins? Let’s try a new business model selling the service instead of the ownership.
Oil of a different origin
€1.2 billion plant will turn used vegetable oils and residues into biofuel that can power heavy transport and aviation
General enquiries and comments
The EIB is committed to open communication and encourages constructive stakeholder input regarding its activities.
Enquiries and comments concerning the EIB’s involvement in a project or the financing facilities, activities, organisation and objectives of the EIB, can be sent to the EIB Infodesk.
Alternatively, the EIB can be contacted through its external offices.
Queries regarding details of a specific project, in particular when it is under appraisal by the EIB, should preferably be addressed directly to project promoters.
Media enquiries
Media-related enquiries can be addressed to the EIB Press Office. Please also visit our Media information section.
Complaints mechanism
Any complaint regarding alleged maladministration can be lodged via the EIB Complaints Mechanism. The European Ombudsman acts as an independent external accountability mechanism of the EIB.
Zero tolerance against fraud and corruption
The EIB has a zero tolerance policy on fraud or corruption. To report allegations of fraud and corruption relating to EIB-financed projects, please contact the Fraud and Investigation division. All complaints will be treated as strictly confidential and handled in line with the EIB investigation procedures and the Anti-Fraud Policy.
Related publications