Ghana-based pay-as-you-go solar firm PEG Ghana Ltd. has raised $3.4 million to expand its presence in the west African country. The firm, which targets remote and rural communities, is aiming to install 500,000 pay-as-you-go systems in West Africa over the next five years, PV Tech reported on Tuesday.
Its latest funding round was led by I&P Afrique Entrepreneurs, a France-based investment group dedicated to small and medium enterprises in Sub-Saharan Africa.
The funding round attracted investment from the Impact Assets Emerging Markets Climate Fund, French investment fund ENGIE Rassembleurs d’Energies, German development finance institution DEG and US debt provider SunFunder.
The pay-as-you-go target market
PEG focuses on households earning $1-10 per day, many of whom are unbanked. It offers pay-as-you-go solar systems for $0.5 per day over a year, payable through mobile money, after which customers own their system outright.
The solar units offer functions such as lighting, mobile phone charging, a lantern and a radio.
Hugh Whalan, the chief executive officer of PEG, said: “PEG is already the largest PAYG (pay-as-you-go) company in Ghana, and we see the off-grid household energy market here as a massive opportunity.
“Our investors recognise that PEG’s early successes in reaching thousands of customers in Ghana barely scratches the surface of demand [in this market].”
Pay-as-you-go on the rise in solar market
West Africa is proving particularly fertile territory for pay-as-you-go solar, with UK firm Azuri Technologies unveiling plans earlier this year to install 100,000 off-grid systems in Ghana over the coming years.
Likewise, in East Africa, the Kenya-based M-KOPA Solar pay-as-you-go service provider announced in Q1 2015 that it had connected an estimated 20,000 homes in neighbouring Uganda to affordable solar power.
Jesse Moore, managing director and co-founder of M-KOPA Solar, said: “We are very proud of the M-KOPA III solar home system and our success to date in Uganda. Together we are helping Ugandans get rid of kerosene, improve their standard of living and save money all at once.”