Herbert Smith Freehills' London Finance team is advising the Government of Malawi through its Malawi Off-Grid Market Development Fund or Ngwee Ngwee Ngwee Fund in relation to a US$ 14 million loan facility and a US$ 6 million results-based grant, provided to five private sector solar companies in order to expand the availability of electricity in certain rural areas in Malawi.
The Ngwee Ngwee Ngwee Fund forms part of a larger effort by the Government of Malawi, supported by the World Bank, to scale up the off-grid solar market in Malawi and achieve 'Malawi 2063', a resolution to significantly improve the economy of Malawi by the year 2063. The project aims to provide first time electricity access to over 200,000 households in Malawi by June 2024 through the installation of solar home systems at subsidised prices.
The five participating solar companies, Zuwa Energy, Yellow Solar, Green Impact Technologies, Vitalite Group, and StarTimes Media, each entered into bespoke loan and grant agreements, negotiated and prepared by Herbert Smith Freehills, to provide funding to the companies for the procurement and operation of solar home systems for the benefit of the end users in Malawi.
In an effort to increase gender equality and equal access to electricity across Malawi, a feature of the loan agreements is an interest step down mechanism incorporated as an incentive for the installation of solar home systems in female-led households.
The transaction was led by London senior associate Joanne Elson and associate Enitoluwafe Owolabi.