ATI Set to Facilitate Financial Close of Salima Solar Project in Malawi

The African Trade Insurance Agency (ATI) is set to provide liquidity support for Malawi’s first grid-connected solar power project, the 60MW Salima Solar PV plant. ATI will utilise its regional liquidity support facility (RLSF), launched in partnership with German development bank KfW in 2017. The facility aims to enable the financial closure of power projects on the continent.

ATI will provide $4.4 million as cover for South African-based Absa Bank, which is providing a standby letter of credit (SBLC) for the Salima Solar PV plant to be constructed about 70km from the capital Lilongwe. In addition, the funds will cover the risk of delayed payment by Malawi’s national utility Escom with an initial tenor of up to 10 years.

ATI notes that the cover will enable $78 million of total project financing as the project is expected to be refinanced following the commencement of operations. The plant is being developed by JCM Matswani Solar Corp Limited, an SPV owned by JCM, and InfraCo Africa. The solar plant is expected to begin operations in August this year.

The Africa Trade Insurance Agency (ATI) was established to provide insurance against political and commercial risk by seven Common Market for Eastern and Southern Africa (COMESA) countries with technical and financial support from the World Bank