As world leaders are convening for COP26, a Rwandan start-up, Ampersand, this week 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.
The 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.
The firm has previously received funding and support from entities such as 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.
Electric mobility is increasingly getting popular across the world for its environmental conservation traits as well as cost-effectiveness in the long run.
The growing popularity across the world has made it possible for start-ups in the sector to easily raise capital buoyed by developments in the sector.
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.
Rwanda has also set the stage to improve ecosystem for investors and players. 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.
The development is proof for local start-ups that there are investors looking to fund players in the sector as well as government support.
With the current call to reduce emissions and mitigate effects of climate change, there is plenty of capital available for operations in the sector.
With the correct identification of the challenges to be addressed, start-ups are likely to receive funding and other support to tackle climate change.