Wednesday, June 23, 2021 / 4:00 p.m. / FSD Africa / Header image credit: FSD Africa
FSD Africa Investments (FSDAi), the investment arm of FSD Africa, rrecently invested US $ 4.5 million in Nithio FI, a renewable energy finance intermediary focused on the off-grid solar sector Pay as You Go (PAYG), to provide reliable and sustainable renewable energy solutions to households and small businesses in Kenya, Nigeria and Uganda.
Nithio Holdings is an AI-based energy finance platform whose mission is to standardize credit risk assessments and therefore generate more capital in the industry, including by investing directly and efficiently in companies. off-grid solar. Over the next five years, Nithio FI aims to provide financing for more than 224,000 energy access products across the continent, including solar home systems (SHS) and appliances for productive use.
Despite growing interest in off-grid solar offerings in Africa, GOGLA statistics reveal that investment in the sector has stagnated over the past five years. In addition, nearly 600 million people across the continent are still expected to be without electricity in 2030, unless significant progress is made in expanding access to finance.
Through FSDAi’s investment, Nithio FI’s innovative approach will unlock capital for off-grid renewable energy in Africa, promoting access to energy for households, small farmers and micro-entrepreneurs who would otherwise struggling to cover costs. This increased access to clean energy will improve approaches to tackling climate change and promote sustainable development. This will be achieved by leveraging Nithio FI’s innovative approach that integrates repayment data and geospatial population mapping into its AI models to produce a standardized credit risk assessment and cash flow forecast. .
Nithio FI uses this data to inform its investment decisions, directing its capital towards scalable and sustainable solutions to the challenge of access to renewable energy in Africa. Nithio FI currently provides asset-backed financing in Nigeria, Uganda and Kenya, with expansion slated for 2022.
FSDAi’s investment complements Nithio FI’s total increase of US $ 23 million. This is in addition to $ 5 million from EDFI ElectriFI (the European Union Funded Electrification Finance Initiative) and a $ 10 million commitment from the American International Development Finance Corporation (DFC ). This complements the business capital provided by Nithio Holdings. Together, these investments will allow Nithio FI to demonstrate the data-driven model, lend to operators in key markets and unlock additional capital. By the end of 2021, Nithio FI aims to raise an additional US $ 25 million.
In addition, Nithio Holdings also recently raised over US $ 7 million to expand its operations and data analytics. The round was led by The Rise Fund of TPG in partnership with Kupanda Capital, joined by Emerson Collective and Powerhouse Ventures.
Speaking on the announcement, Mark Napier, CEO of FSD Africa, said: “Investing in sustainable and efficient energy sources will be essential to building a greener and more inclusive future for African economies. Thanks to this investment, we hope to contribute to the fight against the climate challenge of the continent and the energy deficit which still leaves a lot of it aside. The falling cost of renewable energy technologies means that our investment in Nithio will help deliver clean electricity in an accessible manner across the continent, while scaling up efforts to meet Africa’s Sustainable Development Goals. “
For Anne-Marie Chidzero, Chief Investment Officer, FSD Africa Investments, “Innovation must play a central role in bridging the energy gap in Africa. By leveraging Nithio’s technical and analytical capabilities, we ensure communities most in need have priority access to renewable electricity. Renewable energies emitting the least greenhouse gases and air pollutants, the planet and our health will benefit from investing in greener sources of energy.
Hela Cheikhrouhou, co-founder and CEO of Nithio, said in her remarks: “In order to achieve universal access to energy by 2030, last mile financing must reach billions. Nithio has developed an innovative approach powered by its risk analysis engine to lend to small, medium and large off-grid energy operators to foster scalable connectivity. We are delighted to be working with FSD Africa Investments to achieve this goal.
British Minister for Africa James Duddridge, speaking on the funding agreement, was of the opinion that thanks to the UK’s partnership with Financial Sector Deepening Africa and organizations such as Nithio, thousands of Africans have enjoyed immense support to access more affordable, sustainable and reliable energy solutions and improve living standards.
He noted that as the UK prepares to host the COP26 climate conference, investing in clean and sustainable energy will transform lives and help communities become more resilient to the impacts of climate change on the continent. ”
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