One startup that is particularly tackling the problem of electricity across West Africa, the Ghana-headquartered pay-as-you-go (PAYG) solar company PEG Africa has raised a US$5 million debt funding round from ElectriFI to continue its growth in its existing West African markets.
Here Is The Deal
- The funding comes in the form of subordinated junior debt and will be used for growth in PEG’s existing markets, where chief executive officer (CEO). Hugh Whalan said it had been almost doubling in size every year since 2015.
- The company raised a US$25 million Series C round from existing and new investors towards the end of last year, taking its total raised funding to date to US$50 million, and has now added to that with US$5 million from ElectriFI, the Electrification Financing Initiative, which is funded by the European Union and managed by the EDFI Management Company, established by 15 European development finance Institutions.
PEG Africa uses a PAYG financing model to provide credit for solar home systems to underserved households in Ghana, Ivory Coast and Senegal, and serves over 60,000 households with 400,000 daily users.
“The fact we are now able to raise a significant amount of our funding in debt demonstrates that our approach is financially sustainable. We are delighted to work with ElectriFI to further accelerate our growth,” he said.
Why ElectriFI Invested
Dominiek Deconinck, ElectriFI fund manager, said the fund was thrilled to support PEG Africa on its growth path.
“With 82.000 direct new connections by the end of 2019, together adding not less than 1.7 MW with solar home systems, ElectriFI’s investment in PEG will strongly contribute to improving quality of life through renewable energy in the markets it operates in,” he said.
ElectriFI Has Been The Active VC In Africa’s Renewable Energy Startup Ecosystem
The Electrification Financing Initiative (ElectriFI) is a flexible financial facility funded by the European Union and managed by the Association of European Development Finance Institutions. ElectriFI aims to support investments that increase and/or improve access to modern, affordable and sustainable energy services. The projects must lead to new and improved connections for populations living principally in rural, under-served areas as well as regions affected by unreliable power supply in developing countries.
Read Also: How Startups In Nigeria Are Disrupting Nigeria’s Electricity Problems
The fund claims to have made 19 investments, totalling 27 million euros and enabling:
- 794 kilotons of C02 avoidance
- 243 MW capacity installed
- 1 800 715 connections
- 1 146 GWh renewable energy per year
In June 2019, ElectriFi was one of the investors that invested a total of $9 Million in a Series A round of funding in the Nigerian distributed utility company, Arnergy. The investment was however led by Breakthrough Energy Ventures with the Norwegian Investment Fund for Developing Countries (Norfund), All On, all participating.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.