Ghana-based pay-as-you-go (PAYG) solar company, PEG Africa, has secured a debt funding of $4 million from a $15 million multi-currency facility led by CDC Group and backed by SunFunder and ResponsAbility.
The company explained in a press statement that the secured capital will primarily fund the expansion of their operations in Senegal where it claims to already have thousands of customers.
Speaking on the funds raised and the progress of the company in Senegal, Hugh Whalan, PEG’s CEO, said being backed by the CDC Group will strengthen their presence in Senegal.
“With the continued backing of CDC Group, we expect our growth in Senegal to continue. Importantly, we believe that we will be able to apply our learnings and expansion playbook to yield superior results as we grow into future markets,”Hugh Whalan, PEG’s CEO
Established in 2013 by CEO Hugh Whalan and COO Nate Heller, PEG Africa finances and deploys affordable solar power to consumers (underserved households) and SMEs in West Africa on credit using a PAYG financing model.
Available data shows that PEG currently serves over 60,000 households. It has about 400,000 daily users in Ghana, Cote d’Ivoire and Senegal, and has recently expanded into solar water irrigation.
PEG’s Growth in West Africa
PEG fully turned its attention to PAYG solar in 2014 with a team of 20, but it wasn’t until 2015 that they raised their first investment round. By 2016, they already reached the milestone of financing solar home systems for over 100,000 people and expanded into Cote d’Ivoire.
The firm’s Series B financing came in 2017, raising their total funding to $21M with over 200,000 solar installations. By 2018, the numbers rose to above 350,000 solar home and expanded into their third market Senegal.
This year, the company secured a $15 million senior debt facility from UK DFI, CDC and SunFunder and $5 million debt funding by ElectriFI Innovative Financing. The latest brings the funding raised by the company to over $50 million and raises the number of home solar installations closer to half a million.
Rise of Off-Grid Solar Companies in West Africa
Over 150 million people in West Africa have no access to electricity, spending 30% of their incomes on poor quality, polluting fuels like kerosene. PAYG solar platforms could be offsetting this number by providing limited amounts of electricity to millions of businesses and households.
For instance, in Nigeria, at least 70 million people live in off-grid communities. Meaning small businesses like barber shops, cyber cafes, hairdressing saloons cannot predict the amount of power they will get on any given day, and often have to turn away customers.
Enters PAYG, a business model that has made electricity accessible even to the most remote regions. And, like PEG, more off-grid solar startups are using this model or innovating products that can help Africa have sufficient and clean electricity.
Recently, a Facebook-backed startup VentureBuilder launched to help hasten the off-grid solar growth by providing capital for solar startups that operate in Africa.
With a funding drive that wants to speed up the creation of access to solar systems for homes and SMEs that cannot afford it, PEG is providing the much needed power for industrial development in West Africa.
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