FSD Africa Investments (FSDAi), the investment arm of FSD Africa, has invested $4.5 million in Nithio FI, a renewable energy financing intermediary focused on the Pay as You Go (PAYG) off-grid solar sector. The intermediary provides renewable energy solutions for households and small businesses in Kenya, Nigeria and Uganda.
Over the next five years, Nithio FI aims to provide financing to more than 224,000 energy access products across the continent, including solar home systems (SHS) and productive use appliances.
Despite the increasing interest in Africa’s off-grid solar offerings, GOGLA’s statistics reveal that investment in the sector has stalled over the last five years. In addition millions of people across the continent are still expected to be without electricity in 2030 unless there is significant progress in scaling up financing access.
Through the FSDAi’s investment, Nithio FI’s innovative approach will unlock capital for renewable off-grid energy in Africa, supporting access to energy for households, smallholder farmers, and micro-entrepreneurs that would otherwise struggle to meet the costs. This increased access to clean energy will enhance approaches to countering climate change and promote sustainable development.
FSDAi’s investment complements an already total raised of $23 million. This comes alongside $5 million from ElectriFi (the Electrification Financing Initiative funded of the European Development Finance Institutions Association (EDFI), and a commitment of $10 million from the US International Development Finance Corporation (DFC). By end of 2021 the aim is to raise an additional $25 million.
Commenting on the announcement, Mark Napier, CEO, FSD Africa, stated: “Investing in sustainable and efficient sources of power will be essential to building a greener, more inclusive future for African economies. Through this investment, we hope to contribute towards tackling both the continent’s climate challenge and the power gap which still leaves many behind. The falling cost of renewable energy technologies means that our investment will enable clean electricity to be provided in a way that is accessible across the continent, while also scaling up efforts to meet Africa’s sustainable development goals.”
In response to the announcement, Héla Cheikhrouhou, Nithio Co-Founder and CEO, commented: “In order to achieve universal energy access by 2030, last mile financing must scale to the billions. We are excited to work with FSD Africa Investments to achieve this goal.”
On his part, UK Minister for Africa, James Duddridge, said: “Through the UK’s partnership with Financial Sector Deepening Africa and organisations such as this we are supporting thousands of Africans to access more affordable, sustainable and reliable energy solutions and improve standards of life. As the UK prepares to host the COP26 climate conference, we recognise that investing in clean and sustainable energy will transform lives and help communities become more resilient to the impacts of climate change on the continent.”