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Finance and Policy  
14 February 2017

USAID announces $4m fund for off-grid PV start-ups

With efforts to support geographic expansion throughout Africa, the United States Agency for International Development (USAID), has announced that it will award a $4 million loan to multiple innovative, off-grid solar businesses working in sub-Saharan Africa.

This forms part of the USAID’s Scaling Off-Grid Energy: A Grand Challenge for Development, a global partnership between the U.S. Agency for International Development, Power Africa, the U.K. Department for International Development, and the Shell Foundation.

The agency told ESI Africa that funds will be earmarked for early-growth stage companies that can show a 2:1 private investor match –  i.e. USAID will award $500,000 to companies showing a $1 million private investment match.

USAID supports off-grid entrepreneurs

One long-standing barrier many early stage, off-grid entrepreneurs face is access to capital. USAID designed this funding opportunity specifically to address that problem.

It aims to empower entrepreneurs and investors in achieving 20 million connections to provide households in sub-Saharan Africa with clean, modern and affordable access to electricity by 2030.

Renewable energy sources are ripe for investors: over the last few years, they have become more affordable, efficient and viable for industry to rollout.

According to the agency, sales nearly doubled in 2015, but there is still only about a 3% market penetration of an estimated $6 billion market.

Research has shown that pay-as-you-go off-grid solar companies alone could serve up to 30 million households in off-grid markets by 2020.

Funding model

The Agency has noted the following requirements on their website:

  • 2:1 private investor match: Applicants must demonstrate a financial commitment from a private investor (equity or debt) that is at least twice the funding requested from USAID. For example, under an award, if an investor commits $1 million in funding, USAID could award $500,000. Preference will be given to higher ratios of demonstrated investor commitment to proposed USAID funding.
  • Innovation and market impact: Applicants should be developing and scaling innovative solutions that will have broad reach across the sub-Saharan household solar market with the potential for high market impact. Note: Companies distributing pico-solar products such as lanterns are not eligible under this announcement.
  • Company growth stage: Enterprises should be early stage or early-growth stage, with an existing track record in one or more African markets.
  • Geographic focus: Applicant should be operating in one or more markets across sub-Saharan Africa.

The agency said that concept papers will be accepted on a rolling basis between February 2017 and April 30, 2017.

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One Comment

  1. We are excited about the USAID support for off-grid solar projects in Africa.
    We are embarking on a massive DRC rural solar micro-grid electrification allowing low income earners to purchase power according to their affordability and needs. All this is through a mobile payment build in house through our partners.

    We would be happier to fully engage.

    Best regards,
    G Panzu

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