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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