Nigerian Rensource has successfully raised USD 579 K that will go into combating the electricity problem in Nigeria, in a move to help Small and Medium-Scale Enterprises replace the heavy use of fossil fuel-powered generators with solar systems.
Securing the loan from investors on Trine Financial Limited, the fund will provide no less than 4,000 shops in Nigeria with access to electricity. Trine is a financial service company that invests in solar energy markets involved in distribution and management of the solar products. Rensource aims to make Nigeria the first country in the globe to bank predominantly on distributed, renewable-based power generation.
After nearly six decades of independence, Nigeria’s struggles with the generation and supply of reliable and affordable power remain as debilitating and exasperating as ever. The country’s checkered and unsavoury history with the nuances of power generation and supply is anything but unfounded or far-fetched as it is on record that 50% of Nigerians lack regular – if any – access to sources of reliable energy. Even more damning is the well-documented statistic which indicates that a vast majority of Nigerian households and businesses expend as much as USD 14 Bn annually in the process of generating their own power using energy from diesel generators which ultimately proves neither affordable nor sustainable.
The Lagos-based company, which is making a name for itself as a key provider of distributed energy, has raised a massive USD 3.5 Mn in bridge financing to support its Power-as-a-Service renewable energy business model. This is coming in the wake of a previous seed round of USD 1.1 Mn which was garnered from CRE Venture Capital and Sissili Limited, amongst others, only two years prior. The funds will be channelled towards bolstering Rensource’s ranks, expanding the company’s operations into other strategic locations in the country with Kano and the country’s capital, Abuja, taking pole position, and widening its product base. And it gets even better as the capital influx will facilitate the company’s plans to launch its proposed business-to-business (B2B)-focused offering for both investors and developers.
It is pertinent to note that mini-grids and home solar PV systems represent a colossal USD 9.2 Bn market opportunity annually, helping Nigerians rake in a whopping USD 4.4 Bn in the form of annual energy cost savings. As a matter of fact, REA, the country’s Rural Electrification Agency, has in its blueprint laid out plans to install 1,200 mini-grids to meet the power needs of 200,000 households and as many as 50,000 businesses. Pursuant to this, Rensource aims to enable Nigerians to leverage the company’s initiative and infrastructure so that this “Holy Grail” that is the pursuit of energy independence can come to fruition.
The company’s core belief as put forward by its founders, Ademola Adesina and Jussi Savukoski, in 2015, is founded on the largely-factual notion that distributed power generation will prove a critical element in solving Nigeria’s power problems. Rensource’s tiered subscription-based business model, which was launched in March 2017, offers clean, quiet, reliable, and affordable power with the objective of helping households move on from unreliable public energy providers and generators that run on toxic fossil fuels to a renewable and better source of power. The funding now puts Rensource in better stead for profitable growth on the backs of the Power-as-a Service renewable energy market in the whole of Sub-Saharan Africa.
Considering the caliber of investment (bridge financing) and provided Rensource delivers on its short-term goals in good time (and they already are with this year’s launch of the first micro-utility project in Nigeria as scheduled – a project that is expected to provide clean, efficient, sustainable and cost-effective power to over 12,000 shops in Sabon Gari Market, a major commercial hub in Kano, Nigeria’s second largest city), it will not come as a surprise if the company garners more financial clout in the coming months in the way of substantial Series-A funding.
Totally, the firm has raised USD 5.5 Mn in external equity since its inception in 2016, from shareholders including Bamboo Capital. This power-as-a-service subscription-based electricity service uses solar-hybrid systems that get installed for customers, generation and storing power.