Mini-Grid Project Financing
Finance revenue-backed solar or hybrid mini-grids with clear tariffs, anchor loads, and smart metering. Submit one file through CLOSE to receive a lender-grade memo, a term sheet comparison, and a dated plan to funding.
What You Are Financing
A mini-grid is a local electricity system that serves a defined community or cluster of commercial users. Typical designs are solar PV plus battery with diesel backup, prepaid smart meters, and remote monitoring. Revenue comes from retail tariffs, anchor clients, connection fees, and productive-use programs. Portfolios are easier to finance than single sites because cash flows are diversified.
Commercial Model And Revenue Lines
Retail Tariffs
Time-of-use or flat tariffs with prepaid smart metering. Target high collection rates and low technical losses.
Anchor Load
Long-term offtake from a tower, factory, farm, mine, or public facility that stabilizes base demand.
Connection & PUE
Connection fees, appliance finance, cold storage, irrigation, milling, EV charging, and other productive-use services.
Capital Stack And Instruments
| Layer |
Purpose |
Tenor |
Security And Controls |
Typical Sizing |
| Developer Equity |
First-loss and governance control |
Life of assets |
Share pledge, reserved matters |
10% to 25% of total cost |
| Results-Based Grants |
Per-connection or per-kW support after verification |
Program term |
Verification reports, escrow release |
5% to 40% depending on country and program |
| Senior Project Debt |
Capex for PV, batteries, meters, distribution |
5 to 8 years with sculpting |
All-assets charge, receivables assignment, DSRA, cash sweep |
50% to 70% of net cost after grants |
| Mezzanine / HoldCo Debt |
Portfolio growth and working capital |
3 to 6 years |
Share pledge, distribution lock-up, covenants |
Up to 20% depending on cash cover |
| REC / Carbon Revenue |
I-RECs or D-RECs, and eligible carbon credits |
Annual or multi-year offtake |
Offtake assignment, retirement reporting |
Price uplift to cover opex or debt service |
REC labels such as D-RECs or P-RECs can improve impact and offtake appetite. They sit on top of base certificates like I-RECs and are retired for Scope 2 claims by the buyer.
Risk And Bankability Signals
| Theme |
What Lenders Look For |
Signals That Help |
| Demand |
Proven kWh sales and stable ARPU |
Anchor offtake, signed service agreements, PUE pipeline |
| Collections |
High collection rate and low churn |
Smart metering, prepaid model, remote disconnect |
| Regulatory |
Site permits and tariff approval |
Concession letters, tariff order, compliance calendar |
| FX And Inflation |
Mismatch between local revenue and hard-currency debt |
Local-currency loans, hedging, index-linked tariff mechanics |
| O&M Uptime |
High availability and low outages |
Spares plan, SLA, remote monitoring, battery warranties |
| Portfolio Governance |
Clear SPV structure and reporting |
Ring-fenced accounts, trustee, waterfall and sweeps |
Coverage Metrics And Sizing
| Metric |
Definition |
Typical Range |
| Capex Per Connection |
Total installed cost divided by active customer connections |
USD 500 to 1,500+ depending on geography and design |
| ARPU |
Average revenue per user per month |
Set by tariff and usage. Model growth from PUE adoption |
| Collection Rate |
Cash collected divided by billed amount |
Target above 95% with prepaid systems |
| Load Factor |
Average load divided by peak load |
Improve with anchor clients and PUE programs |
| DSCR |
Cash flow available for debt service divided by debt service |
1.20x to 1.35x at portfolio level, with DSRA 3 to 6 months |
| System Uptime |
Availability of supply to customers |
Target 98% or better. Track faults and mean time to repair |
REC And Carbon Revenue Add-Ons
Mini-grids can generate energy-attribute certificates for Scope 2 claims by buyers. In many emerging markets this is done through I-RECs. Labels such as D-RECs or P-RECs can be layered to channel spend toward distributed or fragile regions. These can be sold forward under offtake to support opex or debt service. Keep surrender and retirement records tight.
Execution Workflow On CLOSE
1. Screening And Fit
Portfolio map, sites and status, permits, tariffs, metering, load and ARPU data, anchor pipeline, and capex budget. Binary read in three business days from a complete file.
2. Indicative Terms
Debt sizing, tenor, pricing, covenants, security, grants and subsidy treatment, REC or carbon offtake structure, and timetable to first draw.
3. Diligence And Approvals
KYC and AML, legal and regulatory, technical and environmental, tariff review, metering audit, FX and hedging, and intercreditor alignment. Approvals tracked in the portal.
4. Documentation
Facility agreements, security package, accounts and controls, funds flow, DSRA rules, REC or carbon offtake, and reporting schedules. E-signature and checklist completion.
5. Funding Mechanics
Conditions precedent met. Draws against verified EPC invoices and site completion tests. Disbursement under counterparty procedures with reserves and sweeps defined.
6. Monitoring
Monthly energy, ARPU, collections, uptime, DSCR, REC issuance and retirement. Covenant tests and cures inside CLOSE.
Submission Checklist
Core File
- Portfolio summary with site list, capacity, status, and GPS
- Tariff approvals, concession letters, and permits
- 12 to 24 months of kWh sales, ARPU, and collection data
- Anchor contracts and PUE program pipeline
- Financial model with sources and uses, ramp profile, and DSRA plan
Collateral And Legal
- SPV structure, ownership chart, and board approvals
- EPC and O&M agreements, warranties, and insurance
- Metering architecture, remote monitoring, and loss reports
- Grant agreements and verification rules
- REC or carbon documentation and retirement procedures
Illustrative Scenarios
Anchor-First Portfolio
25 sites with telecom towers as anchors. Debt sized to tower baseload, retail upside as covenant cushion. DSRA 6 months, sweep above 1.35x DSCR.
Grant-Blended Rollout
Results-based grants reduce capex per connection. Staged draws match verification cycles. Carbon and I-REC offtake assigned to lenders.
Warehouse To Takeout
HoldCo facility funds construction. When 10 sites reach steady state, refinance into an SPV with longer-tenor senior debt.
Frequently Asked Questions
| Can single sites be financed?
|
Yes, but portfolios are favored. A single anchor plus retail demand with solid metering data helps. |
| Local currency or hard currency?
|
Local currency reduces mismatch. If hard-currency debt is used, price in hedging or index-linked tariff mechanics. |
| Where do grants fit?
|
Grants reduce leverage and improve DSCR. They are usually released after verified connections or service delivery. |
| How do RECs help?
|
Forward offtake for I-RECs or D-RECs can add a predictable line item. Keep retirement evidence for buyers. |
| What security is expected?
|
All-assets charge at SPV level, receivables assignment, account control, DSRA, and step-in rights. For HoldCo debt, share pledge and distribution locks. |
Submit Your Mini-Grid Portfolio On CLOSE
Share sites, tariffs, metering data, grant programs, and offtake plans. Receive indicative terms and a dated plan to funding.
Submit Your Deal on CLOSE
Financely Group provides advisory and arrangement services for professional counterparties through regulated partners. We are not a lender and we do not receive, hold, or transmit client funds. Participation is limited to accredited or professional counterparties where applicable. All mandates are best efforts and subject to KYC, AML, sanctions, verification of materials, third party approvals, and market conditions. Minimum preferred transaction size is USD 10 million.