Current levels of investment have put Africa far behind schedule in achieving the United Nations Sustainable Development Goal 7 to deliver universal access to affordable, reliable, sustainable and modern energy by 2030.
Businesses installing solar home systems are in urgent need of low interest rates of working capital, in order to provide rural families with the low-cost financing plans they need to afford these systems.
Energise Africa uses fintech to facilitate investments from individual investors, as well as more experienced investors, in pioneering businesses that install life-changing solar systems in Sub-Saharan Africa homes. This platform allows businesses to extend ‘pay-as-you-go’ credit to low income households, so they can afford to pay for solar energy systems in small instalments over time.
The innovation lies in applying lessons from the growth of alternative finance in Europe to the needs of early stage businesses in the energy access sector and matching these with the evolving needs of investors who want to generate a social, environmental and financial return with their money. The web-based operation enables Lendahand Ethex (the two partner organisations behind Energise Africa) to contain overheads whilst rapidly scaling, which translates into lower costs to the borrower and attractive rates for lenders.
Since the launch of Energise Africa in August 2017, it has raised £3.4 million from 650 investors, providing investment to enable 25,000 families and 125,000 people to access affordable clean energy in Kenya, Uganda, Mozambique and Tanzania.
By crowdfunding investments from UK-based retail impact investors at scale, Energise Africa is helping to enable solar companies on the ground in Africa to grow and expand their scope, providing a long-term, sustainable way of improving clean energy access.
Energise Africa is an evolving initiative which would benefit from further match funding, first loss cover and electronic vouchers to continue to lower the perceived risk to individual investors considering investing in Africa. Energise Africa is also looking to build further awareness amongst a younger and more diverse investor base of the important role impact investing plays in supporting renewable energy access.