A Rwandan start-up, Ampersand, has announced that they have secured a $9 million loan facility from the U.S. International Development Finance Corporation (DFC) to expand its operations in Rwanda and Kenya.
Ampersand is local electric motorbike company that has successfully rolled out electric-powered motorbikes with battery swap stations.
The deal is DFC’s first loan for electric mobility and signifies increasing investor confidence in Africa’s rising e-mobility sector.
According to the firm’s officials, the $9 Million loan will allow Ampersand to scale up the number of electric motorcycles in Rwanda and Kenya to several thousand by the end of 2022.
The loan is in addition to a $4 Million Series A round Ampersand secured earlier in 2021, which was supported by Silicon Valley investor Ecosystem Integrity Fund (EIF) and TotalEnergies.
The firm commercially launched in 2019 with seed capital of about $600,000.
It also received support and funding from FactorE Ventures in 2018, Rwanda Green Fund, USAID’s Development Innovation Ventures, Shell Foundation, the UK FCDO’s Frontier Technology Livestreaming fund, the New Zealand Government, and a loan from Blue Haven Initiative’s Catalytic Fund.
"We’re thrilled to have DFC on board with this historic investment, which is building momentum to electrify all of East Africa’s 5 million motorcycle taxis by 2030. DFC’s support underlines the viability and investability of electric two wheelers for mass-market customers,” Josh Whale, Founder and CEO of Ampersand said.
The firm currently employs about 90 people and has built much of its own proprietary technology, including chips within the battery packs.
Electric mobility is increasingly getting popular across the world for its environmental conservation traits as well as cost-effectiveness in the long run.
The firm is banking on the sector’s growing popularity across the world which has made it possible for start-ups in the sector to easily raise capital buoyed by developments in the sector.
"This is a new and exciting sector. There is a lot of interest and investment around climate change and a firm belief that electric mobility is going to play a big part in the future and is commercially viable,” Whale said in a previous interview.
The firm has also previously expressed readiness to partnerships with players through working with gas station operators to set up battery swap stations as well as motorcycle producers.
If Rwanda was to have all motorcycles as electric in coming years, estimates show that it would require an investment of about $75M with massive returns for investors.
In April this year, Cabinet approved a strategy for electric mobility adaptation aiming at increasing electric vehicles and motorcycles.
Among the key components of the strategy are a number of incentives that apply to electric vehicles, plug-in hybrid electric vehicles and hybrid electric vehicles.
According to officials, the incentives are aimed at attracting investments in the new and upcoming industry.
With an annual vehicle growth rate of 12 per cent in Rwanda, the incentives are aimed at lowering the bar for electric vehicles and motorcycles uptake taking into consideration the popularity of fuel-powered engines.
The incentives cover key pain points in the process of electric vehicles and motorcycles rollout including cost of energy, taxes, infrastructure among others.
The main aim is to make owning and maintaining electric cars and motorcycles less costly in comparison to a fuel-powered vehicle.