DART Equipment Financing Facility Nigeria

The Demand Aggregation for Renewable Technology (DART) Program combines demand pooling, aggregated purchasing and coordinated logistics for solar equipment, with access to affordable finance, to unlock efficiencies in the supply chain to accelerate the growth of the renewable energy sector in Nigeria and beyond.

The DART program has two components:

1. Procurement and logistics aggregation; and
2. An optional equipment financing facility, a short-term financing option to help accelerate the procurement and construction of DRE assets pending closure of long-term financing.

While the procurement and logistics aggregation is available pan-Africa, the equipment finance facility is currently available only for projects in Nigeria. The equipment finance facility is managed by All On, an impact investment company based in Nigeria. The terms and process for availing of the equipment finance facility are described below.

Eligible Projects

• C&I Solar
• Mini-grids
• Small-scale solar for productive use (SSPU)/ Solar Energy Systems (SES)

Indicative Terms of the Facility

Tenor: 24 months; 6-month moratorium on interest and principal repayment

Currency: Available in US Dollars (USD) or Naira (₦)

Interest: Indicative rate of interest: 9% (USD); 13% (₦)

Repayment: Quarterly payment of interest and principal (after moratorium period)

Security: The security structure may include a combination of any of the following:

• Lien on equipment financed
• Comprehensive insurance over equipment financed noting All On as the “first loss payee” until full liquidation of facility
• Charge/Lien on designated accounts into which grant, and project proceeds will be paid
• Charge on other assets, e.g., receivables
• Joint Signatory on account into which grant, and project proceeds will be paid.
• Irrevocable Standing Payment Order
• A dedicated debt service reserve account into which periodic remittances shall be made to build up funds towards repayment
• Personal guarantee of project sponsors.
• Corporate guarantee of parent or related company.

The final terms and security structure will be at the discretion of All On.

Illustrative Document Set for the Facility

• Transaction Agreements (Note Agreement, Security Deed),
• Guarantees (Deed of Personal Guarantee and Deed of Corporate Guarantee),
• Supporting documents (e.g., ISPO, Notice of charge, Acknowledgement of Charge, etc.) – some may be included in a transaction agreement.

Process

Initial Pre-Qualification

The first step in the credit application process is a pre-qualification of the applicant. This step is only required the first time you are applying for credit under the DART equipment finance facility. For pre-qualification, you should already have signed a procurement agreement with Odyssey Energy Solutions. You must also have a grant agreement from REA and relevant community agreements if you are a mini-grid developer. You must have valid PPAs and/or third-party offtake agreements in place if you are a C&I developer, or a Standalone Solar for Productive Use (SSPU) or Solar Energy Systems (SES) developer. In this stage, we will look for evidence of deploying similar projects, mini-grids, systems or solutions in the past.

Please note that in case of SSPU and SES developers, the credit facility will be limited to financing of PV panels and batteries/ BESS only.

Documents required from off-grid mini-grid developers

• Valid executed grant agreements for proposed site/project
• Land lease/tenancy agreement for each project site
• Memorandum of understanding with the host community /tariff agreement/PPA/ Tripartite Agreements (in cases of interconnected mini-grids)
• Procurement Agreement with Odyssey
• Pre-qualification application form

Documents required from C&I Developers and SSPU/ SES providers

• Valid PPA/third-party Offtake agreements
• Valid grant agreement or pre-qualification agreements (SSPU/ SES developers only)
• Procurement Agreement with Odyssey
• Pre-qualification application form

Stage 1: Credit Risk Evaluation and Due Diligence

Developers will only be invited to participate in credit process once All On confirms satisfaction with the information provided in Pre-qualification Stage.

All applicants must upload and submit all relevant information required in this stage.

General

• Certified True Copy of Certificate of Incorporation, CAC Forms CO2 and CO7
• Evidence of clearance of CAC annual returns for the last 2 years at a minimum
• Tax Clearance Certificate for the most recent fiscal year
• Details of company representative (Name, Email address, phone number)
• Proof of legitimate occupancy of your current office location (Tenement receipt, Tenancy Agreement, Certificate of Occupancy, etc.) – no less than 9 months old to application submission date.
• Audited financial accounts (at least 2 years);
• Most recent management accounts
• Copies of existing lending agreements with confirmation from the lender(s) of non-default.
• Evidence that additional funding sources to cover remainder of project costs have been secured. Acceptable evidence includes:
  • Provision of term sheets and/or financing agreements from other investor(s)/lender(s), and /or
  • Proof of existing equity contribution (bank statement showing sufficient closing balance).
• Acceptable financial model showing specific assumptions and projections for each grid/proposed project(s)
• Stage 1 application form should be filled and uploaded providing details for each project

Developers with multiple mini-grid sites will be required to provide a consolidated financial model, in addition to site models.

Additional documents may be required during the due diligence stage.

By completing the stage 1 application you have agreed to be subjected to credit check by a credit bureau in Nigeria at the discretion of All On.

Note: Developers may only progress to Stage 2 upon receipt of satisfactory submission for stage 1. The All On team will commence review of the credit application and will reach out to you within a week or two of your submission for an initial clarification call. We may ask for additional documentation or information based on our conversations and/or review. We will also carry out financial, integrity and legal due diligence on the projects submitted.

Stage 2: Approval and Documentation

Our credit committee carries out a final review of your application and approves or declines your credit application.

Upon approval of your application by the credit committee, we will share with you the term sheet containing final list of Conditions Precedent (CP), Final Agreements and Security Deed. We do not anticipate that the final agreements will be materially different from the drafts shared.

We do encourage you to review the documents provided on time to ensure quick close out on draft agreement and CP finalization.

Disbursement

We will make the disbursement once the agreements are signed, security structure is in place and CPs have been satisfied.