CDC-backed Energy Access Ventures fund invests US$2million in pioneering clean power company Off-Grid Electric.
Over a million homes in Tanzania and Rwanda with no power will have access to solar powered electricity thanks to a company funded by CDC and the UK government.
The CDC-backed venture capital firm, Energy Access Ventures (EAV) has today announced a US$2million investment in Off-Grid Electric (OGE), an off-grid electric company providing clean, affordable solar power to homes in East Africa.
The new investment from EAV will mean OGE can increase their work in Tanzania to power a million homes by 2017. In addition, they will be able to enter the Rwandan market for the first time to get their solar technology to people with no electricity.
This investment supports the ambitions of the UK’s Energy Africa campaign, which aims to accelerate universal energy access in the continent by boosting the household solar market in sub-Saharan Africa. The scale of the challenge is significant - over 600 million people, or two thirds of Africans, do not have electricity in their homes. At current rates, it will take until 2080 for there to be universal electricity access on the continent - 200 years after Edison invented the lightbulb.
50% of businesses in sub-Saharan Africa view a lack of reliable electricity access as a major constraint to doing business. It is estimated that power outages cost countries in sub-Saharan Africa 1-2% of their GDP annually. The latest solar technology, like that from OGE, provides a clean and affordable way to make an immediate difference.
OGE delivers affordable, clean power solutions to rural and semi-urban communities who currently have little or no access to electricity. OGE’s Solar Home Systems are being successfully deployed to power light and appliances in homes and small businesses. OGE helps provide better living conditions and income-generating opportunities to some of the poorest people in East Africa, whilst cutting emissions. http://offgrid-electric.com/#home
CDC invested €16.5 million in the EAV fund in early 2015, playing a vital role in helping the fund to get off the ground. CDC’s investment in EAV was drawn from the DFID Impact Fund, a ring-fenced pool of capital designed to support investors who back enterprises which serve the poor as consumers, suppliers or employees. CDC’s commitment has enabled EAV’s US$2 million investment in OGE, which is part of a larger fundraising process for the energy company. This is EAV’s first investment and with backing from CDC they aim to directly bring electricity to 1 million people by 2020.
Targeting investments in the energy access value chain, EAV held its first closing at €55 million in February 2015, and is sponsored by the leading French multinational Schneider Electric. Its current investors include CDC, the European Investment Bank, PROPARCO, and the OPEC Fund for International Development (OFID).
For more information on the UK’s Energy Africa campaign, go to: https://www.gov.uk/government/news/energy-africa-campaign
CDC Group plc is the UK’s development finance institution. Wholly owned by the UK Government, it invests in sub-Saharan Africa and South Asia with the aim of supporting economic development to create jobs. CDC takes a flexible approach and provides capital in all its forms, including equity, debt, mezzanine and guarantees, to meet businesses’ needs and achieve development impact. CDC has net assets of £4.8bn.