Develop innovative financing for agribusiness and renewable energies

Anchored in the territories in which it operates, Societe Generale is convinced that the development of agricultural sectors and access to electricity are two major issues on the African continent. Driven by the needs of local stakeholders, the Bank wishes to put its expertise and its ability to mobilize partners at the service of the development of these key development factors. Supporting agricultural sectors and energy inclusion require multiple skills that Societe Generale wishes to federate around concrete projects, with measurable impacts.

Societe Generale is committed to strengthening its support for agricultural sector

The agricultural sector contributes to a preponderant share of the wealth produced on the continent and is the primary source of employment. For a long time, Societe Generale has been the banking partner of many local and international players in the sector, attentive to the sustainable development of Africa. The Group wants to continue this commitment by addressing all stakeholders in the sector, including farmers, cooperatives or agribusiness SMEs.

As such, Societe Generale is committed to providing access to a range of banking and non-banking services to one million farmers within five years, thanks to its YUP platform. In each country where Yup operates, they will benefit from at least four banking offers - deposit, withdrawal, different bill payments - and a non-bank offer adapted to a rural environment (health, education, advice ...). This commitment requires a joint mobilization, in association with partners.

It is in this context that Societe Generale's partnership with Mambo Commodities has been set. Committed to the entire cotton value chain in Africa - locally established fertilizer blenders, industrial processing that valorizes the waste from the grading process, cotton trading ... - Mambo Commodities is one of the major players in the sector in Burkina Faso. More than 5,500 farmers, clients of Mambo Commodities, have been equipped with a Yup wallet. They can now directly pay their inputs provided by Mambo Commodities to Yup agents deployed nearby and benefit from the entire offer made available. The adoption of electronic money for the payment of inputs and possibly cotton tomorrow will reduce cash exchanges, eliminating the logistics that accompanied it and related security issues. Like this first operation, with the help of partners, Societe Generale will continue enlisting farmers to reach a goal of one million by the end of 2023.

The agricultural sector includes many players, farmers, cooperatives, SMEs or exporters. Societe Generale wishes to extend its historic commitment to them and understand the needs of agricultural cooperatives and SMEs in the sector. The Group's local presence allows it to turn to those actors who play a leading role in creating wealth in their territories. Societe Generale is committed to supporting stakeholders wishing to contribute to the local valorization of agricultural production, including in the food sectors. Many projects are being studied, in cashew nuts in Côte d'Ivoire, in cotton in Burkina Faso or in livestock production chains in Angola. Societe Generale is strengthening its teams in this direction to develop the expertise needed to apprehend these markets. As an illustration, the structured finance platform in Abidjan will be able to rely on an agribusiness competence center as early as 2019. The technical nature of these markets requires the formation of partnerships, to be part of a logic of cluster of skills.

Societe Generale co-financed in Burkina Faso a study coordinated by the Avril Foundation targeting SMEs processing local agricultural products for the domestic market and export. Societe Generale and the Avril Foundation share the desire to improve the resilience of family farming through the structuring of sectors anchored in the territories. This approach creates lasting jobs that guarantee people's food security. Together, the two organizations are working to implement the recommendations of the study and in particular the structuring of a short-term guarantee fund for SMEs and agricultural cooperatives.
This approach, which will include other partners, is replicable in other

Societe Generale is committed to supporting energy inclusion, including in unconnected rural areas

Access to electricity is constantly increasing in the urban areas of the African countries in which Societe Generale operates. The efforts of local authorities and national companies have supported this development; remain large disparities between urban and rural areas. There are many solutions, extensions of connections to national networks, construction of mini-grids or installation of individual solar systems. Societe Generale will be part of this movement and is committed to promoting access to the electricity grid, supporting energy inclusion, and promoting renewable sources in unconnected areas.

The Infrastructure Development Program in Africa is assessing a priority need for energy financing of $ 360 billion. The objective is the connection of 800 million additional people by 2040. Historically, Societe Generale supports the activity of players in the production and transmission of electricity. The Bank wishes to further its participation in this large company and support the connection of all households living near established networks.

In areas that can not benefit from a connection to the national grid, there are off-grid solutions. The African market for individual solar kits will double by 2020 to more than $ 3 billion, for a target of 124 million households1. By 2040, 45% of the sub-Saharan population is expected to access electricity through mini-grids, or 750 million people2. Access to electricity is a key factor for the development of the targeted areas. This is a major issue for rural areas facing an exodus to the cities and a scarcity of their working population. Societe Generale is committed under 5 years to experiment with off-grid support solutions along 5 axes: finance producers, distributors of equipment directly or via a fund, facilitate the acquisition of equipment through microfinance offers and offer Pay as you go solutions with Yup.

Together, Societe Generale and Schneider Electric have initiated exchanges to facilitate the access of people not connected to individual solar systems. It is in this context that several projects were opened with Amped Innovation, SHS and production equipment supplier, in which Schneider Electric has a stake, and Oolu, its distributor in Senegal. Dealer inventory financing, integration of Yup as Pay as you go solution or material credit financing to end customers thanks to Manko, are all open tracks.

ZECI is a joint venture that has been marketing solar kits in Côte d'Ivoire since the end of 2016 to supply electrical energy to households in areas less well served by national electricity networks. These kits, comprising solar panels backed by batteries to store electricity, are sold in the form of a lease contract with monthly prepayments over 36 months by mobile money.
Societe Generale, through the Structured Financing Sub-Saharan Africa (SFG AFS) platform, and Crédit Agricole CIB (CACIB) organized a € 18 million transaction in favor of Neot Côte d'Ivoire * (Neot CI) - a financing held by the company NEoT Off-Grid Africa, a platform dedicated to investments in off-grid projects in Africa - in order to finance, in the form of securitization, the repurchase of receivables arising from the sale of solar kits by ZECI. This project provides access to electricity to more than 100,000 households in rural areas of Côte d'Ivoire and thereby improves their living conditions. In addition, with the use of mobile payments for the prepayment of the kits, the project also promotes financial inclusion in rural areas. As such, Neot CI has signed a contract with YUP Côte d'Ivoire.
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Source : "New Energy Finance Report and Lighting Global, Off- Grid Solar Market Trends Report", Bloomberg 2016
2 Source : "Off-grid solutions: what perspectives in Africa ? », PwC 2017
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