Renewable energy - Afrikan Heroes

Nigerian Startup Daybreak Power Secures $20M From IFC, Plans Arrival In Togo

May 3, 2021

Nigeria’s Daybreak Power Solutions, a subsidiary of Daystar Power Group, has secured a $20 million debt facility from the International Finance Corporation (IFC). The facility facility will help the startup in its expansion project in Togo and two other countries in the sub-region.

The $20 million is composed of a loan of $10 million in local currency [naira, note], granted by the IFC. The second part will be a subordinated loan of $10 million under the IFC’s Renewable Energy Program for Africa.

While Daystar as a whole plans to raise $100 million over the next three years, it has already successfully raised $38 million in Series B financing from several investors.

The arrival in Togo of Daystar will expand the offers currently available on the market as the country expects universal energy coverage by 2030 in its national electrification strategy.

A Look At Daybreak

Daybreak is 100% owned by Daystar Group. The main sponsor shareholder of Daystar Group is Sunray Group (19.65%) which is the investment vehicle of the founders, Christian Wessels and Jasper Graf von Hardenberg.

The other shareholders include the European development finance institutions, IFU (28.51%); PROPARCO (6.62%); STOA (14.26%); Oreon MLI (19.70%), a venture capital company that actively invests in West Africa; Climate Impact Solutions Fund LP (4.99%) as well as Avatown Holdings (4.90%).

Currently having an installed solar capacity of 8.1 MWp on 156 sites, the startup’s objective is to install a solar capacity of 140 MWp by 2024 via a 4-year investment program in the West African sub-region.

Daybreak Power Daybreak Power

How Startups In Nigeria Are Disrupting Nigeria’s Electricity Problems

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

Renewable Energy Startups Offered $1.2m Innovation Fund

March 31, 2021

A window of opportunity has opened for renewable energy startups to tap into the African Enterprise Challenge Fund (AECF) which launched a US$1.2 million Innovation Fund to unlock the potential of renewable energy to create new business opportunities. Open to businesses and entrepreneurs in Burkina Faso, Ethiopia, Kenya, Liberia, Mali, Mozambique and Zimbabwe, the AECF fund is aimed at strengthening market readiness of emerging innovations, and securing financial, technical, and networking support for taking existing proven prototypes to scale.

Solutions that reduce the negative impacts associated with the use of traditional cooking options at the household and institutional levels, build climate change resilience among communities and support productive uses such as water pumping, agro-processing, cooling, and refrigeration services are examples of those that the fund seeks to support.

“The Innovation Fund is key to enhancing large scale transformation within local communities. Investing in affordable and accessible renewable energy solutions can create jobs, grow economies, and build more sustainable livelihoods. Through the fund, we hope to unearth new ways that renewable technology – be it domestic, communal, or commercial – can be used to generate income and create jobs,” said AECF chief executive officer (CEO) Victoria Sabula.

The deadline for applications is April 29.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Solar Energy Startups In Kenya Have New Licensing Rules To Worry About

December 13, 2020

A stakeholders’ meeting had come to an end on Friday December 11, 2020 at Kenya’s Energy and Petroleum Regulatory Authority (EPRA)’s office in Nairobi, and all parties have known each other’s positions. But the bottom line now is that a new set of rules, Energy (Solar Photovoltaic Systems) Regulations, 2020, would be enacted after all. In a sweeping move, the Energy and Petroleum Regulatory Authority (EPRA) intends, through the proposed regulation, to regulate the solar energy sector in Kenya, a move seen to try and protect Kenya Power from competition, as revenues continue to fall despite the company enjoying monopoly. Many stakeholders have also described the move as an attempt by EPRA “to police the sun”.

*Epra Principal Renewable Energy Officer Caroline Kimathi,*

“We are not here to protect Kenya Power. We are licensing people who are going to install the solar panel. If the stakeholders call for a reduction of the fees to be paid then we are going to adopt that, but in no way is this going to shield Kenya Power,” said Epra Principal Renewable Energy Officer Caroline Kimathi, at the meeting.

What Do The Proposed New Rules State?

The rules are launching a strict licensing regime for the solar energy sector in Kenya. For instance, the rules state that a person shall not engage in the importation, manufacture, sale or installation of solar PV systems or solar PV system components without a valid license issued by EPRA.

The rules further go ahead to empower the Authority to from, from time to time, determine by publication of a notice, the types of solar PV components and solar PV systems to which the regulation applies. But as a general rule, all the products must also conform to the Kenya Standard.

“A manufacturer or importer of solar PV systems, components, and consumer devices shall ensure that the products conform to the relevant Kenya Standard set out in the Seventh Schedule or any other subsequent or applicable Kenyan Standards,” the regulations read in part.

Apart from the above, solar energy companies in the country must also first register all consumer devices with the authority. The implication of this is that manufacturers or importers of solar PV consumer devices shall have their products registered by the authority on meeting the requirements of relevant Kenya Standard or other equivalent international programmes for such products. EPRA will also determine which products are allowed into the Kenyan market, by the rules.

Solar Energy rules Kenya Solar Energy rules Kenya

High Licensing Fees And Increase In Cost Of Doing Business For Solar Energy Companies

If the rules sail through at the end of the day in parliament, it may spell doom for existing and yet-to-exist solar energy companies as the cost of doing business will most certainly increase.
For instance, under the rules, a solar technician is required to pay between Sh2,250 and Sh6,000 ($20 to $54k) to obtain and renew a license.
Similarly, a contractor will pay between Sh3,000 ($27k) and Sh6,000 ($53k) for a licence, which will be valid for three years, with practitioners required to apply for renewal one month before the expiry.
Both technicians and contractors will also be required to obtain insurance policies for their licences of between Sh1 million and Sh10 million ($9000 to $90,000), based on their respective licence categories.
A fine of Sh50,000 ($450), per day, will be imposed on anyone practicing with an expired licence.
The stringent proposed regulation also includes a Sh10,000 ($90) fine if individuals delay renewing their license and Sh20,000 ($180) if they do not issue a completion certificate for a project or warranty for installation.
Additionally, penalties on failure to provide data to EPRA or providing false data will range between Sh5,000 and Sh1 million.
Licenses are based on the capacity of the system to be installed. License classes SPW1, SPW2 and SPW3 are for solar systems with a capacity of not more than 400 watts, 2kW and 50kW respectively. Only SPW4 technicians will be allowed to install solar grids of any capacity.
Investors have poured nearly $1 billion into the development of off-grid solar energy and retail technology companies in Africa such as M-kopa, Greenlight Planet, d.light design, ZOLA Electric and SolarHome. Most of these companies are located in Kenya.

To know more about the proposed rules, click here (PDF).

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

Senegal Approves New VAT Exemptions For Renewable Energy Startups

July 31, 2020

Renewable energy companies in Senegal, including startups, have a new set of VAT exemptions to benefit from. The country’s Minister of Finance and Budget and the Minister of Petroleum and Energy have by a joint decree, set the list of materials intended for the production of renewable energies exempt from value added tax.

The list of equipment benefiting from VAT exemption, under the new laws, concerns energy from solar and wind sources as well as biogas.

Here Is What You Need To Know

Regarding solar energy equipment, the photovoltaic solar panel, the solar thermal collector or panel, the charge regulator, the solar pumping kit etc. have all been exempted from VAT.
This exemption also extends to wind energy equipment such as the tower, blade, rotor, nacelle and core.
Finally, with regard to the biogas equipment, the exemption applies to the biogas stove, the biodigester, the water trap, the substrate mixing device, etc.
However to benefit from the new set of tax exemptions, the exempt equipment must be certified by international certification bodies.
Upon application for exemption, renewable energy companies, including startups, will be issued with exemption certificates by the General Directorate of Customs or the General Directorate of Taxes and Domains.

*Electricity Production in Sub-Saharan Africa: 2014*. *Source: Euromonitor*

According to the Business Council of Renewable Energies of Senegal (COPERES), this initiative constitutes a significant step forward for the development and promotion of renewable energies in Senegal.
The implication of this for renewable energy startups in Senegal is that, at the point of entry into the country of the exempted materials, there shall be no VAT payable on them. However, this is subject upon applications for exemption from tax made by them.
Value added tax (VAT) is levied at a rate of 18% on transactions (supply of goods and services) in Senegal by persons who, either regularly or on a casual basis, purchase goods for resale or carry on activities other than those relating to agriculture.
This is in addition to the corporate income tax (CIT) rate of 30% levied on companies in the West African country.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

Africa-focused Clean Energy Startup MPower Raises $373k On Crowdcube

March 30, 2020

Clean energy startup MPower has reached overfunding on Crowdcube after securing more than £300,000 to expand its Africa focused fintech and clean energy business.

The company is focused on solar powered products that are backed by their software, data solutions and a financing model that supports a distribution network.

MPower provides plug & play solar powered products such as refrigerators and water pumps to rural communities in Africa and have already reached over 2000 end-users in Africa with operations in Togo, Cameroon and Zambia.

Power operates a B2B business model and has established a distribution network which have taken advantage of MPower’s turn-key solutions.

Whilst MPower is making a positive environmental impact, it has combined this with a positive financial impact through a ‘lease-to-financing’ model that empowers bossinesses and individuals.

Financial inclusion

Africa lacks a standardised and broad credit rating system for individuals so MPower has set about developing its own criteria which measures and approves individuals using Big Data.

Not only does this provide rural communities with access to finance, it also helps MPower reduce their credit risk.

This will be crucial as MPower scales and targets the $70 billion African power market. MPower have forecast their model can capture $349 million of this market providing investors in MPower with significant opportunity to gain exposure to the African power delivery market.

Market penetration

The company was established in 2017 and has already earned a cumulative revenue of £550k.

This was largely from operation in Togo, Cameroon and Zambia and there are near-term plans for expansion in Namibia, Cameroon & Togo.

Over the medium-term, MPower has identified Senegal, DRC, Zimbabwe, Ghana, Ethiopia as potential countries for expansion.

Crowdcube

MPower secured £234,540 from an institution as part of the Crowdcube fundraise which will add to prior investment from Innoenergy, Technology Fund and UK-Aid / Energy4Impact.

MPower had an initial Crowdcube target of £300,000 which it comfortably meet before going into overfunding, where investors can still invest.

With stock markets moving through a period of volatility, MPower provides an opportunity in a high growth emerging market uncorrelated with traditional shares.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com

Why Google Backed Out of Kenya’s Lake Turkana Wind Power Project

February 14, 2020

Renewable Energy Chief Executive, Sundar Pichai

Indications have emerged that the incessant delays in delivering on Africa’s largest wind farm, Lake Turkana Wind Project was responsible for the cancellation of plans to buy 12.5 percent of the stake by global technology giant Google. The Lake Turkana Wind Project which has a capacity to produce 310 megawatt (MW) of electricity was initially set for completion in 2017, after which Google made commitments to buy the stake from Denmark backed Vestas Group, however, sources at Google say that the tech giant became uncomfortable with the slow pace of the project and incessant delays, even though they are yet to make it official.

However, a Vestas source said that the delays were primarily due to the transmission line. With the pullout of Goggle from buying the stake from Vestas, efforts are being made by Vestas to enter into commercial dialogues with potential buyers of their shares. This, the source say is because Vestas’ strategy doesn’t include being a long-term wind park owner.

The wind farm was ready for launch in 2017, but remained idle due to delays in installing transmission lines needed to get the clean power to the national grid and customers. The 428 km power line from Loiyangalani in northern Kenya to Suswa in Narok County was set to be completed by October 2016, but demands for compensation from landowners along the route and other issues delayed it.

The line was further delayed after a Spanish firm contracted to build the line went under. Kenya then tapped a Chinese company to complete it. The Lake Turkana wind farm is expected to provide 15 percent of Kenya’s total electricity needs.

In recent times, Google has shown some hunger in acquisition of stakes in fields outside its online advertising business. It has also runs other ventures, including investments in renewable energy projects. It has invested billions of dollars in solar and wind power plants with a total capacity of 5,475 megawatts to generate returns besides contributing to efforts in fighting climate change.

Speaking on Google’s desire to invest in renewable energy, Chief Executive Sundar Pichai said in 2017 that “we became the first company of our size to match our entire annual electricity consumption with renewable energy (and then we did it again in 2018) as] a result, we became the largest corporate buyer of renewable energy in the world.”

Google now has an interest in 52 renewable energy projects around the world, committing more than $7 billion to construction that will create thousands of new jobs. Norfund’s stake in the Turkana power project was acquired in 2013 at a cost equivalent to 1.2 billion Kenyan Shillings. The project cost a total of €623 million $703 million), with debt investors providing 70 percent of the amount or €436 million ( $492 million).

Shareholders, including Norfund, the Danish Climate Fund, Sandpiper and Finnfund, provided the rest of the capital. The project has been credited with boosting Kenya’s electricity supply while reducing reliance on the more expensive diesel-powered plants that harm the environment through pollution.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Renewable Energy Startups In Africa Have A New $8m Fund

September 24, 2019

A new investment fund which is dedicated to renewable energy in Africa has been launched. The new fund is called Empower Invest, which is registered as an Alternative Investment Fund (AIF) under the Financial Supervisory Authority in Norway.

The fund is as a result of efforts of development partners who put it at the service of Africa. In concrete terms, the new fund will be used to finance small renewable energy projects, ranging from 1 to 10 MW.

Here Is All You Need To Know

Titled Empower Invest, the fund will contribute to the know-how and equity to implement solar PV, small hydro and hybrid plants.
It will support projects that are individually too small for traditional project financing. Once completed, Empower will raise green bonds to finance the portfolio of projects.
The fund which will be managed by Empower New Energy will invest in a pipeline of reserved projects prepared by the manager (Empower New Energy) in Kenya, Rwanda, Ghana, Nigeria, Ethiopia and Tanzania, amongst others.
The initiators behind Empower Invest, which is registered with the Financial Supervisory Authority in Norway as an Alternative Investment Fund (AIF), targets to raise $50 million.
Already, over $8m has been raised from Norfund, a Norwegian government private equity firm, and Electrification Financing Initiative (ElectriFI), an EU-owned investment fund that aims to support the private sector in providing electricity in underserved areas in the Serie A share issue.

“It is amazing that we now have succeeded to raise an equity fund that focuses on local solar PV, hybrid and hydro projects. This is the first fund of its kind, and most needed. ” said Terje Osmundsen, founder and CEO of Empower New Energy.

Several private investors also participated in Empower Invest’s fundraising efforts. This is the case of Malthe Winje Automation AS, the Elisabeth Grieg and Stig Grimsgaard Andersen family, Doctor Magne Orgland, Harald Magnus Andreassen and Svein Tveitdal.

“We are delighted to support, for a decade, the ambitions of the Empower Invest fund’s business model, which aims to produce more than 600 GWh of clean energy per year, which will reduce CO2 emissions by 320,000 tonnes per year and create thousands of new jobs and electrical connections,” explains Dominiek Deconinck, ElectriFI’s Director.

Series B issue of approximately $40 million is planned for 2020.

Why The Investors Are Investing

“Norfund sees a huge need for increased investment in local clean energy production in Africa and developing countries in general. The collaboration with Empower will be an important platform for raising private capital for this market” stated Norfund CEO Tellef Thorleifsson.

Stig Grimsgaard Andersen, a private investor in the fund was quoted as saying that:

“If impact-investing is to make a difference, it is important that the investments create value for both financial investors, local communities and the environment. We believe the Empower Fund is an important innovation in this area.”

Harald Magnus Andreassen, chief economist and one of the private investors, noted that local projects and smaller investment amounts receive little attention from international investors and lenders.

However, “the Empower Fund is an important initiative to cover this gap in the market,” said Andreaseen.

To learn more about the fund manager, click here

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