Mobile pay-go solar pioneer d.light announced it raised another $10.5 million of capital this morning (Jan. 16) to help fund its international expansion. D.light offers a growing range of mobile pay-go home solar products and services in low income communities in Africa and Asia, a business model that is breaking the mold that has guided and informed international development and for-profit energy and power sector investment in developing economies for over half a century.
It’s a local, socially and environmentally driven business model that has been gaining adherents among venture capital (VC) and private equity investors, as well as within the development community and power sector, to the degree that d.light CEO Ned Tozun will talk about the coming “Fourth Industrial Revolution” at the upcoming World Economic Forum annual meeting in Davos, Switzerland Jan. 17-20. D.light raised $22.5 million in a Series D funding round in September and $7.5 million in debt in October. This latest infusion of capital brings the total it has raised in four months to $43 million.
Kick-started by multilateral development programs, notably U.S. President Barack Obama’s Power Africa program, African governments and international investors are coming to view mobile pay-go solar as a legitimate and effective means of fostering broad-based sustainable socioeconomic development in a way that taps into the latent talents, knowledge and abilities of local residents.
Lighting Up the Night
D.light’s latest capital infusion comes in the form of a $5 million equity investment on the part of Norfund, a state-owned Norwegian investment fund dedicated to investing in sustainable enterprises in developing countries, and $5.5 million of grant funding from Power Africa’s Beyond the Grid and Shell Foundation.
“Norfund invests in profitable and sustainable enterprises that contribute to economic growth and poverty alleviation. Access to energy is a key input for development, and we believe energy mix for the foreseeable future also will include off grid solutions, in particular for rural households and businesses,” Mark Davis, who leads Norfund’s Clean Energy investment unit, explained in a news release.
“In countries where energy access is low for the vast majority, solar has the ability to impact people living there in a multitude of ways.”
For instance, d.light’s latest capital raise comes as Kenya (its original market territory) announced it plans to invest $150 million to finance installation of solar energy systems in off-grid community market centers, schools, shops and some households, as well as on farms to power irrigation pumps.
Mobile Pay-Go Solar Going Nationwide in Kenya
Kenya’s off-grid solar development plan is part of a broader based World Bank initiative expected to receive funding in March that would see solar mini-grids installed in areas of 14 counties the government categorizes as marginalized, according to World Bank documents.
Off-grid solar-storage mini and microgrid systems are the cleanest and most cost effective way to bring electrical power to un- and poorly served areas, remote and isolated communities in particular, Kenyan officials said.
“Kenya is one of the best prepared countries in Africa in providing such solutions,” explained Pavel Oimeke, director of renewable energy at Kenya’s Energy Regulatory Commission.
More than 400 companies registered in Kenya are capable of fulfilling solar energy contracts, and more than 300 technicians have been trained and approved by the government to support solar energy systems and technology, he noted.
D.Light: Empower 100 Million by 2020
D.light has sold more than 15 million solar lighting and power products in 62 countries since it was founded in 2007, reaching some 65 million of the estimated 2.3 billion people worldwide that lack access to grid power, according to the company. The goal is to empower 100 million by 2020.
Monthly sales are running in the hundreds of thousands of units, a breakneck pace. The capital d.light has raised is critical in order for it to keep pace while maintaining the high quality of its products, management pointed out.
“We are deeply grateful for the support of the investors in this latest funding round, which will help us empower more people in these regions,” Tozun stated. “The demand for off-grid solar is taking off, and we’re now well prepared to meet the needs of customers who need our products the most.”
One hundred million people had replaced kerosene and other fossil fuels with pico and small home solar PV systems for lighting as of June 2016, resulting in $433 billion in energy-related savings, according to a study conducted by the World Bank Group’s GOGLA and Bloomberg New Energy Fiannce.
Commenting on his upcoming participation at the annual World Economic Forum coference, Tozun said: “Progress in energy access through off-grid solar can catalyze a chain of events that move the developing world into new forms of financial inclusion and internet connectivity, which will in turn significantly increase GDP. Growing these sectors requires massive support. Attending the World Economic Forum Annual Meeting gives us the opportunity to engage with leaders from all walks of life, and we look forward to collaborating on solutions for societal and global concerns that have been neglected for too long.”