FMO signs US$598k convertible note to ZIZ Energie to improve green energy access

CHAD – FMO, a Dutch Entrepreneurial Development Bank, has signed an €500,000 (US$598,280) convertible note through its Ventures Program to ZIZ Energie (ZIZ), a privately-owned integrated power company in Chad.

The investment is part of a €2 million (US$2.39m) convertible round in a co-investment with Energy Access Ventures (EAV) and marks the start of a larger investment round that aims to allow ZIZ to scale its operations and improve green energy access to households and smaller businesses in secondary towns across the country.

ZIZ was established in 2006 by Chadian electrician, Ibrahim Zakaria, starting off as an electrical EPC company.

The company quickly diversified into rural and urban electrification, electrical equipment distribution, EPC and energy services for C&I.

“EAV and FMO co-investing in ZIZ Energie is a testimony of how the energy access market is likely to evolve in the next decade, towards more local entrepreneurs, public partnerships and smart grids.”

Emmanuel Beau – Founder and Partner, EAV

“ZIZ is the perfect fit for FMO Ventures Program, which aims to empower innovative business models that improve access to goods and services such as electricity to the un(der)served in emerging markets,” Marieke Roestenberg, FMO Ventures Program Manager.

“We believe that local companies like ZIZ are best positioned to champion affordable clean energy access efforts in frontier markets. We are excited to be able to support ZIZ’s ambitions to scale, together with our trusted partner EAV.”

The first financing round will cover development costs – including initial investments in the corporate E&S Management Framework – and part of the start of the construction of the first site “Mongo”.

The next phase involves constructing the 2.5 MW of Solar PV power generation and 5MWh of battery storage, as well as replacing ZIZ’s existing diesel-powered mini grids. Over the next five years, ZIZ intends to roll out 20 mini-grids in Chad.

“EAV and FMO co-investing in ZIZ Energie is a testimony of how the energy access market is likely to evolve in the next decade, towards more local entrepreneurs, public partnerships and smart grids,” Emmanuel Beau, Founder and Partner at EAV said.

“FMO is an outstanding partner for ZIZ to unlock and seize the growth opportunity in Chad, alongside EAV. We are excited about the impact of this transaction and how it can foster access in Central African countries.” 

According to Africa Global Funds, Chad is one of the poorest and least developed countries in the world, ranking 186th out of 188 countries on the UN Human Development Index.

The country has an installed generation capacity of 176MW, with only seven towns connected to the grid. The overall electrification rate currently stands at 10% while rural areas are at a mere 1%.

This makes Chad heavily dependent on expensive, diesel-powered gensets (EUR 0.8-0.9/kWh), with households paying an average of 77 cents per kWh. ZIZ aims to reduce this price to 40 cents per kWh.

Having successfully operated five diesel-powered sites in several Chadian towns for the past decade, ZIZ is now developing largescale ‘metro-grids’ by hybridizing and expanding these sites with solar energy and battery  storage to extend their distribution network and increase population coverage and operating hours.

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