International Finance Corporation (IFC) is considering a proposal to invest $57 million in Yoma Micro Power, which builds, owns and operates small scale power plants and solar-powered mini-grids in Myanmar.
According to a disclosure made by the unit of World Bank, the proposed investment includes a loan of $30 million, and fresh equity of $7 million, besides a managed co-lending portfolio program (MCPP) loan of another $20 million.
Yoma Micro Power caters to energy demand in off-grid areas, telecom industry, and the commercial and industrial segment. In off-grid rural areas, it provides scalable solar micropower plants in partnership with local governments and authorities.
The energy company also offers its electricity services to off-grid telecom towers, which are otherwise reliant on expensive diesel generators. Yoma Micro Power estimates there are more than 10,000 off-grid towers in Myanmar that use an estimated 125 million litres of diesel per year and emit more than 300,000 tons of greenhouse gases.
After successfully completing a pilot involving 250 telecom towers in March 2020, the company is seeking to raise additional capital to complete a 58-month project spanning over 2,000 tower sites, 375 community electrification sites and 30 MW of commercial and industrial rooftop power.
The total project cost is expected to be about $204 million, which will be financed through a combination of debt, equity and internal accruals.
Yoma Strategic Holdings holds a 35 per cent stake in the energy company. Other shareholders include IFC (30 per cent), Norfund (30 per cent) and Yoma Micro Power founder and CEO Alakesh Chetia (5 per cent).
Currently, 65 per cent of Myanmar’s population lacks access to grid electricity, Yoma Micro Power says on its website.
The proposed investment, IFC said, supports the expansion of solar distributed generation that can both replace diesel fuel currently being used by tower companies and provide electricity to off-grid businesses.
“IFC’s involvement will provide longer-term financing that is not readily available in a domestic market with relatively limited financing and capacity to evaluate project financing in a relatively nascent sector,” the international lender said.
In March, IFC proposed a $30 million commitment in a risk-sharing facility for a portfolio of loans to SMEs and very small enterprises (VSEs) to be originated by Myanmar’s Yoma Bank Limited.