Off-​​Grid Electric Raises $25M From DBL Partners and SolarCity for Micro-​​Solar Leasing in Africa

Greentech Media
October 22, 2015

Octo­ber 22, 2015 —

by Kather­ine Tweed|Greentech Media:

The com­pany plans an expan­sion into Rwanda and seeks to reach 1 mil­lion homes in Tan­za­nia by 2017.

Off-​​Grid Elec­tric closed a Series C invest­ment worth $25 mil­lion on Wednes­day to expand its micro-​​solar leas­ing plat­form in Africa.

The round was led by DBL Part­ners, which pro­vided the major­ity of the fund­ing, and also included West­ern Tech­nol­ogy Invest­ment and pre­vi­ous investors SolarCity, Omid­yar Net­work, Seri­ous Change LP, Vul­can Cap­i­tal and the pri­vate invest­ment firm of Microsoft co-​​founder Paul Allen. Off-​​Grid raised $23 mil­lion last year.

The funds will be used to enter its sec­ond African mar­ket, Rwanda, and to con­tinue to scale up its part­ner­ship with the Tan­zan­ian gov­ern­ment to power 1 mil­lion homes by 2017.

Our real inten­tion is to light con­sid­er­able parts of coun­tries here. We want to pro­vide an elec­tri­fi­ca­tion solu­tion that’s dif­fer­ent and much more cost-​​effective [than the grid],” said Xavier Helge­sen, co-​​founder and CEO of Off-​​Grid Electric.

Given the falling cost of solar and bat­ter­ies and the ground­work laid by many non­prof­its, the mar­ket is strength­en­ing for off-​​grid dis­trib­uted renew­ables in devel­op­ing coun­tries. Last year, nearly $64 mil­lion was invested in off-​​grid solar solutions.

The Global Off-​​Grid Light­ing Asso­ci­a­tion esti­mates today’s off-​​grid solar mar­ket at $300 mil­lion annu­ally, and 2015 invest­ment fig­ures are likely to be higher than 2014.

Other large solar com­pa­nies are pay­ing atten­tion. SunEdi­son has com­mit­ted to bring power to 20 mil­lion peo­ple by 2020 through a range of busi­ness mod­els and tech­nol­ogy offer­ings deployed by local partners.

The invest­ment is DBL’s first over­seas, but a nat­ural fit given that Nancy Pfund is a long­time investor and board mem­ber of another Off-​​Grid Elec­tric investor, SolarCity. Nancy Pfund will join Off-​​Grid Elec­tric as chair of the board.

I’ve been able to see how good they are with exe­cu­tion,” Pfund said of watch­ing Off-​​Grid Elec­tric grow since SolarCity first become acquainted with the com­pany. “We can accel­er­ate their learn­ing curve on how to do this right.”

Off-​​Grid Elec­tric fol­lows SolarCity’s approach but tai­lors it for the African mar­ket. As with SolarCity’s leas­ing model, Off-​​Grid Elec­tric allows peo­ple to pay for the elec­tric­ity from solar with­out own­ing a sys­tem outright.

But Off-​​Grid Elec­tric diverges from SolarCity there. It uses a mobile-​​payment plat­form to allow cus­tomers to pur­chase energy in small amounts, essen­tially a micro-​​solar leas­ing model that the com­pany has dubbed M-​​Power. The model is work­ing, and the startup is installing more than 10,000 sys­tems per month and employs more than 800 peo­ple in Tanzania.

This is the time,” said Pfund. “This mar­ket demands an entre­pre­neur­ial solution.”

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