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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