Why EDFI ElectriFI Splashes $7.5M on Solar Electrification in Nigeria and Kenya
Access to electricity remains a major challenge for Sub-Saharan Africa, even as the rest of the world has shifted its focus to safe and clean energy sources. According to the custodian agencies of Sustainable Development Goal (SDG) 7 report, “Tracking SDG 7: The Energy Progress Report,” – which examines the progress made toward the achievement of SDG 7, “ensure access to affordable, reliable, sustainable, and modern energy for all” by 2030 – while progress has been made toward increasing electricity access globally—441 million more people have electricity in 2019 compared to 2010—the report highlights how the world is not on track to achieve any of the targets under SDG 7. The report also stated that the trajectory has been further deviated due to the COVID-19 pandemic, which places additional strain on supply chains and consumer income and is expected to exacerbate the electricity access deficit in 2020.
SDG 7’s key targets include ensuring universal access to electricity and clean cooking solutions, increasing renewable energy share, improving energy efficiency, and, finally, increasing international collaboration to support clean and renewable energy efforts.
Unfortunately, Sub-Saharan Africa accounts for 75% of the world’s population without access to electricity. The region’s access deficit has grown from 556 million in 2010 to 570 million in 2019. Importantly, while the number of people without access to electricity in Sub-Saharan Africa has increased overall, from 33% in 2010 to 46% in 2019, the share has decreased due to rapid population growth. This pattern suggests that electrification is lagging behind population growth in many places, particularly in the Democratic Republic of the Congo, Nigeria, and Malawi. However, in countries such as Kenya and Mali, electrification progress has outpaced annual population growth.
What you should know about EDFI ElectriFI
The Electrification Financing Initiative (ElectriFI), a blending facility funded by the European Union and managed by the EDFI Management Company, was founded to provide more of the world’s population with access to electricity. ElectriFI aims to unlock, accelerate, and leverage private sector investment in developing countries to increase or improve access to affordable, reliable, sustainable, and modern energy.
EDFI ElectriFI intends to accelerate the development of businesses that will provide clean energy to hundreds of millions of people by 2030. The unique business model of ElectriFI is based on EU funding, allowing it to invest in local markets in poorer economies and fragile situations. EDFI ElectriFI can take more risks than other investors because it combines technical assistance and risk capital. EDFI ElectriFI’s activities de-risk investments and allow private investors and development finance institutions to deploy capital that they could not have invested otherwise.
The firm has recently invested $7.5 million in two renewable energy firms in Nigeria and Kenya, respectively, via the ElectriFI Country Window for Nigeria and Kenya, which was created in conjunction with EU Delegations and host governments. It significantly contributes to the national electrification goal, as part of a Team Europe approach to assist both enterprises’ efforts to give access to energy to mini-grid developers using mesh-grid technology, with a target of 76 000 beneficiaries by the end of 2025.
Okra Solar Raises $4.5M Funding
The benefitting clean energy startup from Nigeria, Okra Solar was given a $4.5 million working capital facility, designed to bridge the financing gap in the supply chain and help it leverage the high demand for its technology, penetrate the Nigerian market further, and eventually speed up sustainable electrification.
Okra Solar, founded in 2016, creates mesh-grid technology comprised of their unique Okra Pod and offered in conjunction with PV panels, batteries, and inverters to electrify underprivileged or unserved communities. At the core of Okra Solar’s value offer is the Okra Pod, a revolutionary gadget that allows the solar systems placed at each residence to interact and exchange electricity through a low-voltage transmission connection.
The startup is currently concentrating its efforts on the strategically critical Nigerian market. The goal is to deploy various pilot projects and power more than 30 000 households in Nigeria during the next two to three years.
Given the reason for their investment in the startup, Maud Watelet, ElectriFI Senior Investment Officer at EDFI MC said “The technology developed by Okra Solar is transformative. We are proud to contribute to facilitating and accelerating the development of micro- and mini-grids for rural electrification across Nigeria. Given the various awards received by Okra, we are confident that the highly skilled Okra Team will thrive within this complex industry.”
Inga Stefanowicz, Head of Green and Digital Economy at the Delegation of the EU to the Federal Republic of Nigeria & ECOWAS further added “The European Union’s support to Okra through the ElectriFI Nigeria Country Window assists the country’s efforts in accelerating energy access to people in underserved and unserved communities. As such, it is at the heart of our partnership with Nigeria, which among others, aims at improving reliable energy access to seize the environmental, social, and economic potential of renewable energy.”
Solarise Africa Receives $3M Investment
In the same vein, Solarise Africa, a pan-African Energy-as-a-Service startup, received $ 3 million from EDFI ElectriFI to provide bespoke financing solutions for decentralized energy solutions to chosen commercial and industrial (C&I) customers throughout the continent. The cash will help Africa have access to sustainable energy.
“As an existing shareholder holding shares under the Series A and Series B rounds, EDFI ElectriFI is proud to reinforce its partnership with Solarise Africa and to support the service platform in growing its assets portfolio in Kenya,” said Geraldine Crosset, ElectriFI Senior Investment Officer at EDFI MC. We anticipate that this investment will bridge the financial gap until the company’s future stock round.”
What the receiving organizations are saying
“Even with off-grid solutions like mesh grids being 10 times cheaper than grid extension for hard-to-reach communities, 80 million people continue to live off-grid in Nigeria. Okra is incredibly excited to work with EDFI ElectriFI to deploy innovative financial tools that will enable local developers to deploy mesh grids at scale and continue rapidly bringing power to the people,” said Afnan Hannan, Co-founder, and CEO, of Okra Solar.
While Jan-Albert Valk, Co-founder, and CEO, of Solarise Africa on his part said “Solarise Africa appreciates the trust EDFI ElectriFi continues to place in us with this third investment. With the funds, we can further expand our team and hope to make solar energy a reality for more businesses and to help drive renewable energy adoption on the continent.”