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SOLAR ENERGY

THE N6 BILLION BOI SOLAR ENERGY FUND

The Bank of Industry (BOI) has reviewed its Solar Energy Fund into a N6 billion Solar Energy Fund to enable various categories of End users (Commercial and Residential) acquire reliable solar solutions. The funds can be accessed directly from BOI or indirectly through Deposit Money Banks (DMBs) or Microfinance Banks (MFBs) by End users or Solar Energy companies. The product has the following features:

TARGET MARKET The target market includes the direct beneficiaries of the funds as follows:

 

i.        Homes and Businesses (Agribusiness, Solid minerals, Artisans, Service and Hospitality industries, etc)

ii.        Project Developers (providing solar solutions for Residential Estates, Educational Facilities, Healthcare facilities, etc)

iii.        Deposit Money Banks (DMBs)/Micro Finance Banks (MFBs) (through on-lending.

 

A detailed list of end users is attached as Appendix I

 

CRITERIA  

Ø  There must be clear demonstration of viability for business operations vis-à-vis cost-savings, profitability, etc.

 

PROJECTED IMPACT ·         Cleaner and healthier environment from reliable and sustainable energy source.

·         Attendant reduction in greenhouse gas emissions from utilizing fossil fuels, thereby contributing to climate change mitigation.

·         Boost inclusive economic growth and development, especially in view of the current economic situation in the country, leading to job creation, poverty alleviation.

·         Improve quality of life and general welfare of the citizenry.

 

PROGRAM LIMIT N6.0 billion
SINGLE END-USER LIMIT Maximum of N350 million per end-user
FUNDING STRUCTURE:

 

 

On-lending

Micro – users requiring less than N5 million per end user

·         Funds for this category will be disbursed under an on-lending arrangement with Deposit Money Banks (DMBs)/Micro Finance Banks (MFBs).

 (the single obligor limit per user shall not be more than N350m)

 

 SMEs & LE

 

(a.)       Mini –users: Requiring between N5million – N20million per end user.

(b.)       Standard users: Requiring between N20million – N350million per end user

This limit is available to existing and new SMEs and Large enterprise customers.

Funds for this category will be via direct lending from BOI. The Debt shall not exceed 80% of the total project cost, while the Equity contribution shall be a minimum of 20% of the project cost (i.e. Debt: Equity ratio of 80:20).

  Project Developer The limit for this category of customers (solar energy developers) shall be between N20m –N350m.

The fund shall be for the following:

(1.)        Various categories of SMEs and LEs /clusters.

(2.)        Clusters of Business enterprises (micro).

(3.)        Residential estate.

(4.)        Shopping malls and quick service centers.

(5.)        Hospitals and educational facilities etc.

( detailed list of end users is as attached in Appendix I)

OBLIGOR TYPE  

i.             Project Developers: can access financing to deploy solar solutions for the different categories of end users.

 

ii.            Small, Medium and Large Enterprises (including Cooperative
Societies):
can access financing to acquire solar solutions for
Commercial/Productive uses.

 

iii.           DMBs/ MFBs: can access financing for on-lending to both (i) and

           (ii) above.

 

 

 

 

PRICING

 

 

A.   For Direct Lending by BOI:

Interest rate:

·         9% per annum payable at the end of every month or quarter.

          Fees:

·         1% Appraisal Fee

·         1% Commitment Fee

·         0.125% Monitoring Fee (to be paid quarterly)

 

 

B.    For On-lending:

 

To be referred to the participating DMBs/MFBs

 

TENOR A.   For Direct Lending by BOI:

·         Maximum of Five (5) years inclusive of the moratorium period.

·         Moratorium of three (3) – six (6) months on principal repayment for existing businesses.

·         Moratorium of six (6) – twelve (12) months on principal repayment for new businesses.

 

B.    For On-lending:

 

We will refer to participating DMBs/MFBs

 

SECURITY ARRANGEMENT/

 

COLLATERAL SUPPORT

 

  1. For Direct lending by BOI:

           For Facilities up to but not exceeding N10 million:

i.        10% Cash security deposit.

ii.        Two (2) external Guarantors with Notarized Statement of net worth. (Eligible Guarantors attached as Annex 2).

iii.        Personal Guarantee of the Chief Promoter/Notarized Statement of net worth.

iv.        All Assets Debenture on the equipment to be financed.

v.        Credit life insurance of the Chief Promoter.

vi.        Insurance of the financed items against burglary and theft, fire and any other hazards.

vii.        Moveable collateral to be considered upon establishment of Collateral Registry.

 

 

        For Facilities above N10 million:

i.              Bank Guarantee, Legal Mortgage or Mortgage Debenture (with Fixed Asset Coverage of not less than 1.5).

ii.             Personal Guarantee of the Chief Promoter/Notarized

Statement of net worth.

iii.        Credit life Insurance of the Chief Promoter.

iv.       Insurance of the financed items against burglary and theft,

fire and any other hazards.

 

 

DISBURSEMENT In accordance with agreed milestones.
REPAYMENT SOURCE From the proceeds of business financed (either directly from the Businesses or indirectly from the Project Developers and DMBs/MFBs).
REPAYMENT MODE Repayment will depend on the nature of the cash flow of end users:

Quarterly or Monthly repayment of either or both principal and interest.

OTHER CONDITIONS       i.        Provision of not less than two (2) years warranties on all components by the Developer/Supplier.

 

ii.        Execution of Service Level/Maintenance Agreement between Developer/Supplier and End-user.

 

iii.        Strong and reliable monthly net cash flow that can support monthly loan repayment at the ratio 3 to 1 (i.e. net cash flow to loan principal repayment).

 

(Applicable to direct-lending arrangement)

 

Please contact any of the undersigned for more information:

  1. Austin Egwuche: aegwuche@boi.ng; 08023063137
  2. Ruseh Oghenekaro: roghenekaro@boi.ng; 08035744466
  3. Ibrahim Idris: iidris@boi.ng; 08104333122