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Off Grid Electric rebranded ZOLA Energy, touts latest US$20m debt finance drive

Image: ZOLA Energy.

Zola Energy, one of two US-headquartered providers of off-grid solar-plus-storage solutions to the African continent profiled in’ recent Global Storage Opportunity 2018 report, has obtained US$20 million debt financing.

Zola was until recently known as Off Grid Electric, leasing or selling solar home kits to individual households in Tanzania, Rwanda, Ghana and the Ivory Coast. In the ‘Global storage opportunity…’ report, Zola Energy CTO Joshua Pierce was interviewed along with Rick Wuts, VP for business development at Powerhive, about the decisions of both companies to now use lithium-ion batteries in their business models for Africa.

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Sunfunder, a solar energy financier group ‘majority-based’ in the Kenyan capital Nairobi, contributed US$5 million towards the latest debt finance deal for Zola, while an unnamed “values-aligned family office” took care of the remainder. It is the third time Sunfunder has brokered a deal of this nature with the company. Zola said the family office also acted as arranger.

Expansion into four new African countries

At the beginning of 2018, the then-Off Grid Electric raised US$55 million through a Series D funding round, in which investors included GE Ventures, venture capital subsidiary to General Electric (GE) and led by Helios Investment Partners, which is focused exclusively on investments in Africa. Other high profile investors into the company include impact investment firm DBL Partners, led by Nancy Pfund – one of the early backers of Tesla and SolarCity.   

The debt financing is aimed at expanding Zola’s activities into an additional four African countries, representing around 25,000 new customers. The loan will mature in 2021. At present, the solar-plus-storage pay-as-you-go solutions offered by Zola enable households and communities to not only improve energy access overall and become less dependent on diesel for energy, but also to reduce the use of kerosene for lighting, which can pose an immediate health concern to rural populations as well as costing more money in the long term.

East Africa enjoying rise in economic activity through pay-as-you-go solar

In the Global Storage Opportunity 2018 article, Powerhive and Zola Energy representatives talked about the economic empowerment that comes with affordable energy access. A mid-July report from GOGLA (Global off-grid lighting association), with which Zola is affiliated, highlighted some of the real-world impacts already seen by households in East Africa from being connected to reliable sources of energy for the first time.

‘Powering Opportunity: The Economic Impact of off-grid solar’ found that small-scale solar is driving a rise in economic activity, including improvements in job and income opportunities. More than 2,300 small-scale pay-as-you-go solar customers were surveyed in Kenya, Mozambique, Rwanda, Uganda and Tanzania towards the beginning of this year.

More than a third of respondents had enjoyed a US$35 monthly increase in income, which GOGLA said equates to more than half the average monthly GDP per capita in the countries surveyed. One in 10 have started a new business of some description, while 7% have begun new employment roles as a consequence.

Nearly half (44%) said that they are now able to use energy productively at night times, while 90% of those replacing kerosene for domestic lighting said they are already enjoying improved health and are more assured of their safety at home. One billion people in Africa and Asia still lack access to electricity, but in just eight years since 2010, GOGLA claims more than 120 million people have been able to leave kerosene behind and switch to off-grid solar PV.

Download the Global Storage Opportunity 2018 here, free (subscription details required).

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