BURKINA FAS0 – The International Finance Corporation (IFC) a member of the World Bank group, has announced a €12.4 million (US$13m) financing package for energy company Sodigaz, to boost access to cleaner and more reliable energy in Burkina Faso.
IFC’s support will help Sodigaz increase the distribution of liquified petroleum gas (LPG) to underserved rural households across Burkina Faso and bring solar energy to a 1,000-unit affordable housing project near the capital, Ouagadougou, contributing to better health outcomes and supporting the country’s transition to cleaner energy.
The financing package consists of a local currency loan up to the equivalent of €8.4 million (US$8.81m) in CFA francs from IFC’s own account and a parallel loan equivalent to €4 million (US$4.19m) in CFA francs mobilized from a partner commercial bank.
“IFC’s support will help strengthen Sodigaz’s capabilities, bring to fruition structuring projects, enhance its operational efficiency, and develop households’ access to clean cooking and solar energy solutions in Burkina Faso,” said Lala Bolly, Chief Executive Officer of Sodigaz.
In Burkina Faso, only about 20% of the population is connected to the grid (around 65 percent in urban areas and less than 5 percent in rural areas), limiting social and economic development, with much of the population of 21 million reliant on wood and charcoal for cooking.
“IFC is proud to support a local champion’s ambition to support cleaner energy supply in Burkina Faso through investment in renewable energies and accelerating the switch to cleaner LPG from solid fuels.”
The IDA PSW LCF helped provide long-term financing in CFA francs that would not otherwise be readily available in the local market.
The financing announced today builds on an agreement between IFC and Sodigaz signed in September 2021 when IFC began providing advisory support to Sodigaz in three key areas: the development of distribution models and value chains for clean energy solutions; improvement of efficiency of operations; and financial management.
For the next three years, IFC aims to increase its investments in the Sahel, including mobilization, in key sectors for growth and social progress, such as infrastructure, green energy, agribusiness and value chain development, and financial inclusion.