Off Grid Electric announces $45 million debt financing for distributed solar leasing to African households, raising a total of $70 million in investment this year
SAN FRANCISCO, CA – December 17, 2015 – Off Grid Electric today announced an investment vehicle to finance more than $45 million in distributed solar and battery storage for African households and small businesses. This is the first financing vehicle of its kind for distributed solar in Africa and a critical milestone in the creation of a new asset class of institutional and impact investment.
Off Grid Electric, based in San Francisco, California and Arusha, Tanzania, is currently installing solar in over 10,000 new homes and businesses per month. The financing vehicle makes it possible for the company to provide its radically affordable solar leasing platform to one million customers in Tanzania living on as little as $1 per day.
The David and Lucile Packard Foundation, Ceniarth, Calvert Foundation and other family offices will lend up to $40 million to the vehicle. U.S. Agency for International Development's (USAID) Development Innovation Ventures program will support the facility with a $5 million grant, its third round of tiered funding
“We have pioneered a business model that allows consumers with no formal credit to use their existing energy budget to finance solar. We simply redirect funds they were already paying for kerosene and batteries to a solar lease payment,” said Xavier Helgesen, co-founder and CEO of Off Grid Electric. “This fund provides the template for any country in Africa to offer affordable solar energy to every citizen in their country.”
“After spending last week at COP21 for the signing of the historic Paris Agreement, I am thrilled to announce this new type of financing that will help Africa grow into a fossil fuel free continent,” said Bill Lenihan, CFO and Head of Business Operations of Off Grid Electric. “The commitments made in Paris require huge capital investments and this new facility is a significant step forward in bringing clean energy access to the off grid world."
Off Grid Electric has a partnership with the national government and Tanzanian Investment Centre to power one million households with solar in the next three years. Juliet Kairuki, Executive Director of the Tanzania Investment Centre, said, "As an avid promoter of technology and innovation through investment, Tanzania Investment Centre is pleased that through the Off Grid investment initiative, technology has been introduced to the country that will offer pioneering and sustainable clean energy to power homes.”
This announcements follows Off Grid Electric’s recent $25 million Series C equity round, led by DBL Partners, which was the largest venture capital round to-date for distributed energy in Africa. In total, Off Grid has raised $70 million in equity and debt financing in 2015 to support its vision of lighting Africa in a decade.