Engie, SunFunder News Highlights Off-Grid Solar's Growing Role in African Sustainable Development
- Oct 28, 2017 6:26 am GMT
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The combination of popular mobile e-money and cheap, safe, reliable, efficient home solar energy technology is proving to be a potent combination when it comes to achieving sustainable development across the developing and less developed world. Recent developments in Africa highlight the trend.
The African off-grid solar industry is maturing and investor interest is growing, and fast. Among the highlights:
- $4.8 million in government funding yields $200 million in private investments: Today at the Unlocking Solar Capital: Africa conference in Abidjan, Cote d’Ivoire, USAID announced $4.8 million in new grants to allow six companies to provide capital to household solar systems to expand operations, scale innovations, test new business models and finance new rural electrification connections to millions. The grants will leverage up to $200 million in private capital and are part of the Scaling Off-Grid Energy: Grand Challenge for Development.
- Engie agrees to buy solar-power firm Fenix to expand in Africa: Last week, Bloomberg reported the acquisition of Fenix, a solar company that last year received $750,000 in funding from the Scaling Off-Grid Energy Grand Challenge for Development to expand into Zambia. Fenix is a great example of how quickly the African off-grid solar market is maturing and its readiness for additional investment: In 2016 Fenix relied on government seed funding to enter a new market, and a year later was acquired for expansion into 10 African countries.
- Increased syndicated investments: SunFunder has organized a group of investors previously too risk averse to get into the African off-grid solar sector to invest $6 million as a group. SolarNow and SunFunder have now completed five transactions together, tracking the growth of the sector itself from humble origins to larger and increasingly sophisticated deployments.
The news from Engie and SunFunder shines light on the growing role international, private sector investors are playing in adding fuel to young, ambitious African off-grid solar energy startups.
Europe's Engie has been particularly active lately when it comes to acquiring or taking equity stakes in solar and other distributed renewable energy businesses, as well as developing projects. In addition to the proposed acquistion of Fenix, Engie has acquired bankrupt Sungevity's European business and taken an equity stake in Unisun, a Chinese PV developer.
An international collaboration on the part of sustainable development and social enterprise minded clean energy entrepreneurs, Fenix International employees 350 people. More than 140,000 customers are using its ReadyPay mobile pay-as-you-go solar energy products and service, according to an Oct. 19 press release.
Engie and Fenix management have agreed for the former to acquire 100 percent ownership of the latter. Terms and conditions were not disclosed. It's estimated that some 600 million Africans lack reliable access to modern electricity services.
“Fenix will be the agile growth engine for ENGIE’S SHS business in Africa and enable us to become a leading profitable off-grid energy services company on the continent, reaching millions of customers by 2020, stated Bruno Bensasson, CEO of ENGIE Africa. “We do believe that universal access is now reachable in a foreseeable future by the combination of national grid extensions, local microgrids and solar home systems.”
“To date, Fenix has delivered solar power to over 900,000 people in East Africa. By joining forces with ENGIE we will greatly accelerate the path to our vision,” added Fenix International CEO Lyndsay Handler. “We will continue to relentlessly pursue an exceptional customer experience in all we do, and together we will make universal access to modern energy a reality.”