Leading international law firm Herbert Smith Freehills is advising the Government of Malawi through its Malawi Off-Grid Market Development Fund, or Ngwee Ngwee Ngwee Fund (the Fund), in relation to a loan facility and a results-based grant, provided to five private sector solar companies. The funding will help expand the availability of electricity in certain rural areas in Malawi.
The five participating solar companies are Zuwa Energy, Yellow Solar, Green Impact Technologies, Vitalite Group and StarTimes Media. Herbert Smith Freehills negotiated and prepared bespoke loan and grant agreements, which each of the five participating solar companies entered into, to provide funding to the companies for the procurement and operation of solar home systems for the benefit of the end users in Malawi. 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 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 Herbert Smith Freehills team was led by Finance senior associate Joanne Elson and associate Enitoluwafe Owolabi.
Joanne Elson commented:
"We are proud to be advising the Government of Malawi on this significant investment which will contribute towards improving electricity for all access across Malawi."