Application To Solar Power Initiatives
In the case of a stablecoin, the value of a token is linked to the value of a currency (e.g. 1 coin = 1 USD).
For our solar ecosystem, we are introducing the Zuva token. Zuva is Shona – the predominant language of Zimbabwe – for “sun.” The value of each token is backed by the energy capacity of the pool of solar assets. The token will therefore have an intrinsic value backing its value expressed in terms of the pool’s output: as a starting point, each Zuva is backed by 1 kWh of solar energy production. This intrinsic value represents the price floor for each token which, depending on market demand, may trade at a premium without a price ceiling.
Tokenization offers a number of additional benefits for solar project finance:
  • Faster capital raising: the greater efficiency of token-based funding means that it will be possible to raise funds for larger projects such as utility-scale solar plants with greater upfront capital requirements (e.g. licensing fees, component costs, land acquisition).
  • Store of value: tokens can be used to reflect cash inflows from existing projects (Power Purchase and Leasing agreements), in addition to being used as a means of assigning ownership of future cash flows.
  • Liquidity option for equity investors: investors who purchased equity using fiat currency can convert their (less liquid) equity for tokens, acquiring liquidity for themselves without having to remove liquidity from the system.
Copy link