West African-based hybrid solar power solutions provider Daystar Power, announced a Series B investment of $38 million. The round was led by the Danish development finance institution (DFI), the Investment Fund for Developing Countries (IFU).
IFU is joined by new investors STOA, a French impact infrastructure fund, Proparco, the French DFI, backed by a guarantee from the European Union under the African Renewable Energy Scale-Up facility (ARE Scale-Up) and Morgan Stanley Investment Management.
Taking into account the previous round by Verod Capital and Persistent Energy, Daystar Power has received equity investments totaling $48 million.
The company noted that with the fundraise it will grow its operations in its key markets of Nigeria and Ghana, while deepening its presence in other regional countries such as Côte d’Ivoire, Senegal and Togo.
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Daystar Power further assured to be on track to expanding its installed capacity to over 100 megawatts, meeting demand from its clients in the financial services, manufacturing, agricultural and natural resources sectors.
“By offering our commercial and industrial clients cheaper, reliable and cleaner power, we have seen a more than 50-fold increase in power-as-a-service revenue over the last two years,” said Jasper Graf von Hardenberg, CEO and co-founder of Daystar Power.
“African businesses are realising that solar power — stand-alone or in tandem with a second power source — is a superior energy alternative to the often-unreliable grid or too expensive, polluting diesel generators.”
Scaling off-grid solar
Thomas Hougaard, the vice president for sub-Saharan Africa at IFU, also commented: “We believe that Daystar Power has the right elements — the client base, technology, engineering expertise, and executive leadership — to scale off-grid solar across West Africa. Not only is Daystar Power at the forefront of a growing market, it is helping to accelerate the adoption of renewable energy in some of Africa’s fastest growing cities.”
“STOA is excited to start this journey alongside Daystar, which is perfectly positioned to provide reliable, environmentally friendly and cheap electricity to businesses across West Africa. This investment reflects a core part of our mission – we aim to invest more than 50% of our capital in Africa and in renewable energies,” said Charles-Henri Malecot, the CEO of STOA.
Damien Braud, the head of private equity for the Africa & Middle East division at Proparco, added that his company is delighted to support the growth of Daystar Power, which represents our third commitment under the ARESUF facility backed by the European Union. “In line with Proparco’s objectives of improving energy access and reducing greenhouse gas emissions, this funding will enable DSP to expand reliable power supply at competitive cost to West Africa’s C&I sector.”
Morgan Stanley Investment Management’s Climate Impact Solutions fund seeks to generate compelling returns with a focus on helping to solve critical climate issues, said Vikram Raju, the head of climate impact at Morgan Stanley Investment Management AIP Private Markets.
“Our aim in partnering with the team at Daystar Power is to help deploy clean energy at commercial scale – creating a positive, long-lasting environmental, health and financial impact in West Africa,” Raju added.
“Sunray Ventures founded Daystar Power to address one of West Africa’s most significant barriers to economic development — access to reliable and affordable power. We are happy that this transaction will provide Daystar Power with the required financing to continue to lead in off-grid solar for commercial and industrial customers in West Africa,” said Christian Wessels, the co-founder of Daystar Power and Sunray Ventures.