Senegal’s Ministry of Finance, as part of its renewable energy objectives, aims to procure and install 50,000 off-grid solar-powered streetlamps across the country’s rural areas, a project that will now be supported with Islamic financing.
The Islamic Corporation for the Insurance of Investment and Export Credits (ICIEC), a subsidiary of the IsDB that insures credit and political risks, signed a Non-Honoring of Sovereign Financial Obligation agreement with Standard Chartered to support the funding of the project, valued at EUR103 million (US$112.68 million).
A Non-Honoring of Sovereign Financial Obligation contract comprises coverage protecting against losses that may result from a government’s failure to make a due payment. The financing under the agreement incorporates Islamic finance principles, a statement confirmed.
Standard Chartered acted as the lead structuring and coordinating bank, and lead arranger for the facility, while law firm Baker McKenzie advised the bank and the ICIEC.
“It’s part of Standard Bank’s strategic priorities to accelerate the transition to net zero and we were able to use our expertise in financing to structure our first green loan for the Senegal government to install solar-powered streetlamps across the country, helping improve the Senegalese renewable energy mix,” Sujithav Sarangi, the executive director of structured export finance at the bank, noted.
The solar streetlamps project is expected to improve the quality of life of communities in rural areas, and to support economic activities that rely on consistent access to energy.
“This initiative is not just about illuminating streets; it’s about empowering communities, enhancing safety and sparking economic growth in rural areas. By harnessing the power of solar energy, we are taking a significant step towards energy independence and security in Senegal, aligning perfectly with Sustainable Development Goals 7, 11, 10 and 17,” said Oussama Kaissi, CEO of the ICIEC.
Senegal has, over the past several years, received support from the ICIEC through investments totaling US$3.6 billion, involving risk mitigation and credit enhancement solutions, for projects including the Blaise Diagne International Airport, Stade du Senegal (Abdoulaye Wade Stadium) and Dakar Expo Center.