Access to finance is one of the key challenges, facing the renewable energy sector in Africa, as it requires a huge upfront capital. According to Energy Access Report, the total financing needed to reach universal electricity access globally by 2030 is at least $52 billion USD per year. Sadly, the energy access markets have only absorbed less than $1.7 billion in disclosed energy access investments up till 2018. Despite this, there is a growing trend of corporate-level investment in the sector. In 2018, annual disclosed investment crossed the $500M+ mark for the first time, growing by 22% YoY from 2017 to a year-end total of USD $511.55 million equivalent.
Financing techniques aside the traditional debt, equity, grant, etc, are coming up. One of them is crowdfunding, and it has been receiving much attention, as a means to raise capital from multiple individuals. You will recall that two months ago, Azuri Technologies, announced her partnership with crowdfunding platform Energise Africa to raise £2.5 million for pay-as-you-go-solar in order to help more than 100,000 off-grid people in Sub-saharan Africa
Now, Daystar Power and Trine, a Swedish investment platform has partnered to finance solar power plants in West Africa. This will be done through a round of debt investments for a total of €500,000 ($559,878) for Daystar Power’s latest captive power installations for commercial customers in Ghana, Nigeria, Togo and Senegal. This is aside the recent $10 million USD investment with Verod Capital Management and Persistent Energy Capital LLC
Daystar Power provides Solar Power Systems ranging from 20 KWp and up to 5 MWp. Daystar provides clients with a monthly payment option that reduces capital outlay and thereby making it easier to switch to a cleaner energy solution. A key differentiator for Daystar Power is its focus on a high quality of service using only best-in class equipment with long-term warranties and a strong local technical support services team
Usually, investments in solar power plants in Africa have been done by large institutional investors. The energy investment landscape is dominated by private capital, but the sector’s top dealmakers consist of public and private investors, mostly leveraging
specialized or dedicated funds focused on the energy access space. Trine and Daystar Power are turning the tables around, by allowing individuals and companies to participate in financing the expansion of solar power. This financing round allows individuals and companies to invest in Daystar Power’s projects with as low as €25 ($27).
Commenting on the development, Christian Wessels, Executive Chairman of Daystar Power, stated that: “We are excited about our partnership with Trine, as it will allow a new class of investors to invest in our solar power plants in West Africa. In Trine, we have found a partner who is as passionate about impact investing and solar power as we are.”
Trine simplifies investment in renewable energy. Through Trine, €19 million has been invested in 27 different companies. The results have been astonishing: about 400,000 people have gained access to electricity, 31,000 tonnes of carbon dioxide emissions have been avoided and €2.8 million has been repaid to investors
On the partnership, Christoffer Falsen, CFO and co-founder of Trine mentioned that: “We are happy that with Daystar Power, we have found our first partner company which is active in the commercial and industrial space of solar power. We are confident that through our loans, Daystar Power will be able to make significant contributions to protecting the environment and fostering local job creation.”