Nigerian renewable energy startup, Arnergy has closed a $9 million investment drive led by Breakthrough Energy Ventures, with participation from All On Energy, ElectriFI and Norfund.
Founded in 2014 by Femi Adeyemo and Kunle Odebunmi, Arnergy provides solar power solutions to businesses and residential customers. And in its 5 years of existence, Arnergy has been able to install over 2MW of electricity for its 2000 clients across Nigeria. But the startup hopes to scale beyond this, hence the funds raised.
In a press briefing held yesterday in Lagos, Arnergy’s founders and investors explained the reasons for the fund while charting a course for the future.
CEO and Co-founder, Arnergy, Femi Adeyemo explained that 1000 megawatts of power is needed for 1 million people and in a country like Nigeria with 200 million, 200,000 Megawatts of power is required. But that’s not the case as the country’s grid has 12,000 Megawatts of installed capacity, with only about 4,000 produced for its citizens. Arnergy will be doing more to change that.
We are excited to enter this next phase in Arnergy’s development. We believe that energy needs in Nigeria have surpassed rudimentary requirements of low power utilization and our product offerings are solving for reliability and not just access.Femi Adeyemo, Founder and CEO of Arnergy.
With the influx of new capital, Arnergy has an extended menu. The startup will be scaling its commercial growth with new business models and partnership opportunities most especially for its 5 Kilowatts modular system.
For Arnergy, its business model accommodates only energy-for-productive-use consumers and not off-grid communities. This sets it apart from other renewable energy players in the country, and it’s why the startup is targeting markets such as health, education, hospitality, agribusiness, SMEs for now. This model could have significant impact on the Nigerian economy which currently loses $29 billion yearly to unreliable electricity.
In the next 5 years, the startup hopes to power 35,000 homes and businesses across Nigeria. The startup will also be expanding across Nigeria, starting with Abuja and Port-Harcourt.
Speaking on the funding, Bunmi Adekore of Breakthrough Energy Ventures, an investor-led fund made up of members of the Breakthrough Energy Coalition, says the investment is an interesting one as it will shift Africa’s narrative as a dark continent.
“This was a very interesting round to participate in. Arnergy is the vision of the future and we want to see it replicated across Sub-Saharan Africa,” he added.
He further gave a vote of confidence to the current Arnergy team stating that they are a “long term vision for profitability and a clean environment.”
On his part, Dr Wiebe Boer, CEO of the Shell funded All On said that the new deal is very important for Nigeria as it reiterates that local energy companies have what it takes to compete with their foreign counterparts.
All On is a local investor and Arnergy is one of our first investments. If you look at the renewable energy sector in Kenya, all of the players are foreign companies but in a country like Nigeria, most companies, like Arnergy, are Nigerian.Dr Wiebe Boer, CEO of the Shell funded All On
In response to a question of not solving Nigeria’s power issue entirely, Anders Blom of Norfund, says that while Arnergy is not providing a solution to the entire power problem of the country, it is resolving a part of the big problem. This, however, does not rule out ambition, as Arnergy says it could expand its model and go bigger in the future.
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