Tanzanian solar energy provider secures US$18mn

Posted on :Wednesday , 24th August 2016

Tanzania-based solar energy provider Off Grid Electric (OGE) has received a total funding of US$18mn for its operations in East Africa.

The financing is provided by two funds in a combination of equity and debt, with US$10mn coming from Helios Investment Partners, a pan-African investment firm, and US$8mn in debt financing from responsAbility, Swiss-based asset managers specialising in development-related sectors of emerging economies.

The revolving working capital facility will be used to finance the purchase and transport of OGE’s inventory until its installation in Tanzania. The facility is secured by the inventory.

OGE CEO Xavier Helgesen tells GTR that the company plans on developing relations with local banks as it grows, but in this early stage it is focusing on raising capital with impact investors and funds.

“As with many high-growth start-up companies, banks are not an appropriate source of funding in early stages,” he says. “As the company matures and demonstrates the reliability of its cashflow, it will deepen its relationships with local banking partners to include local lending. This round of financing is a critical step on this path, as responsAbility is a lender to many local micro-finance organisations.”

OGE’s solar panel solutions power more than 100,000 households and businesses in urban and rural areas in Tanzania and Rwanda.

The energy consumption is paid using mobile payment systems such as M-Pesa, allowing customers to control how and when they pay. “Our customers rely on their mobile devices to make payments. So without mobile payments, it would be very difficult to do what we do,” says Helgesen.

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