A partnership between BBOXX, an off-grid energy solution provider, and Lendahand Ethex, a UK-based online impact investor, aims at raising £2.5 million to allow the former to extend its rollout of life changing solar systems across Rwanda and three other African countries.
The partnership aims at raising the amount through small investment offers to be able to roll out energy in Rwanda, Togo, Democratic Republic of the Congo and Nigeria, according to a statement.
Some £250,000 to be raised in the first phase is expected to be invested in Rwanda to provide clean energy to 2,500 families.
The first offer, launched yesterday, will enable BBOXX to raise low cost inventory finance directly from Lendahand Ethex’s growing base of socially motivated impact UK-based investors, with the goal of providing 2,500 rural Rwandan households with life changing solar systems, the statement said.
UK aid Africa will be providing matched funding of 25 per cent of the campaign value to boost the impact of UK social impact investors, it added.
Energise Africa was launched last year with financial support from UK aid and Virgin Unite with the objective to accelerate progress towards the achievement of the UN agreed Global Goal 7: to ensure access to affordable, reliable, sustainable and modern energy for all by 2030.
Lack of energy access in sub-Saharan Africa is a significant problem, with more than 600 million people currently without electricity supply.
In Rwanda, over 70 per cent of the population cannot access grid electricity, which has a negative impact on the economy.
BBOXX is helping to address this issue by providing off-grid communities in Rwanda with smart, affordable and clean energy solutions, it says.
BBOXX customers typically pay around £3-5 per month on a pay-as-you-go basis and this payment method offers more access to people who are able to have electricity at home at a price they can afford.
BBOXX has hitherto installed more than 150,000 systems and provided around 750,000 people with access to energy. The company says it is driven by a vision to provide clean, reliable energy to 20 million people by 2020.
“At BBOXX we are dedicated to exploring innovative ways to finance the scaling of our business – enabling us to provide even more people with affordable, clean energy. Working with Lendahand Ethex as crowdfunding via their Energise Africa campaign represents an exciting mechanism to help us access critical finance to achieve our objectives,” the statement added.
“This raise is part of the first credit facility of many, which is likely to result in up to £10 million of retail investment over the next few years, providing an estimated 100,000 households in Africa with access to clean and affordable energy,” said Mansoor Hamayun, the chief executive, BBOXX said.
Energise Africa makes it simple and straightforward for eligible retail investors through to more experienced investors to invest in solar businesses that can deliver a clear social, environmental and financial return.
The first Energise Africa project for BBOXX will focus on Rwanda and aims to raise £250,000 of investment in order to provide clean energy to 2,500 families.
Investors in this BBOXX bond offer will also generate a potential annual return of 5 per cent over a 36-month period and these returns can also be held tax free within an Innovative Finance ISA. Capital is at risk and returns are not guaranteed.
“We are really excited to be working with BBOXX, connecting them with our growing UK retail investor base who are motivated to make investments to support the acceleration and achievement of UN Sustainable Development Goal 7 – universal access to affordable, reliable, sustainable and modern energy for all by 2030,” Danny den Hartog, Managing Director Lendahand Ethex said.
“One of the main inhibiting factors to increasing solar energy access in sub-Saharan Africa is the availability of competitive finance with a current funding gap of $2.5 billion. Through Energise Africa we are providing solar businesses with an alternative low-cost finance option that ultimately creates a win for our investors, a win for the solar businesses and a win for African families,” Danny added.
Rwanda’s solar sub-sector has three major operators, BBOXX, Ignite Power and Mobisol, which have so far contributed about 11 per cent of national power access.
The Government has a strategy to electrifying the entire country by 2024.
The new 7-5-2 plan aims at connecting all the households in next seven years, by 2024, connecting all the productive users by 2022, and ensuring that whole of Kigali city is connected in the next two years, by 2019.