West Africa-based pay-as-you-go (PAYG) solar company PEG Africa, has raised a Series C round of USD 25 Mn, a financial development which brings the firm’s total funding to USD 50 Mn.
PEG Africa, who has used the funding reception to cement its position as a market leader in the regions, provides credit for useful and productive assets, such as solar home systems, to underserved households in West Africa via its PAYG financing model. This enables the Ghana-based company’s customers to replace their perpetual spending on poor-quality polluting fuels such as kerosene with solar energy.
USD 20 Mn of this round is in debt, with CDC Group, the UK’s development finance institution arranging a USD 15 Mn multi-currency facility. CDC is joined by existing lenders SunFunder and ResponsAbility. The remaining USD 5 Mn million comes in the form of equity investments from existing investors, Energy Access Ventures, Blue Haven Initiative, I&P Afrique Entrepreneurs (a fund managed by Investisseur & Partenaires) and Acumen Fund, as well as from new investors, Total Energy Ventures and the Renewable Energy Performance Platform (REPP). PEG was advised in the transaction by Nixon Peabody LLP.
“As the first PAYG financing company to set up in West Africa, we have always felt that we could build a large, profitable business by being laser-focused on financing the solar needs of underserved customers in this region.
Our solar solutions deliver better, cleaner and cheaper energy to our customers, and we have been successful at expanding rapidly and profitably while improving the lives of some of the poorest and most vulnerable in the countries we operate in. More than 50 percent of PEG’s customers earn less than USD 3 per day, while 89 percent do not have access to the national electricity grid, and 82 percent never received financing or access to credit before PEG entered their lives.’ said PEG CEO, Hugh Whalan.
Per the fundraiser, CDC Managing Director Holger Rothenbusch said in a welcome message that: ‘‘We are very excited to be supporting PEG, which is the leading off-grid solar company in West Africa. This facility is the first local currency debt provided by CDC to a solar company in the region and marks an important step towards reducing the sector’s exposure to currency fluctuations and increasing its long term financial sustainability.’’
PEG serves over 60,000 households (more than 300,000 beneficiaries) through 70 service centers, over 400 full-time staff and 550 commission based sales agents. More than 150 million people live with no access to electricity in West Africa and spend up to 30 percent of their incomes on poor quality, polluting and sometimes dangerous fuels like kerosene, candles, and batteries.
Acknowledging this growth potential, Ademidun Edosomwan, Senior Investment Manager at Total Energy Ventures said ‘‘We have been following PEG for a while, and PEG’s leadership in West Africa, where Total also has a large footprint, made it a logical investment’’.
PEG is a leading pay-as-you-go financing company in West Africa, operating in Ghana, Ivory Coast, and Senegal. PEG provides credit for useful and productive assets to underserved customers, and by doing this, we help customers to gain ownership of assets that they would not otherwise be able to afford. Importantly, as customers pay off their loan to PEG, we start to understand their credit history, which is a valuable tool we can then use to provide for additional loans for products and services.
PEG has 400 full-time staff, over 550 commission-based sales agents, and has earned many prestigious awards including the International Ashden Award (UK) for Innovative Financing, being named by London Stock Exchange as one of the Fast Growing Companies in Africa. More recently PEG won awards in Ghana for ‘Small Business of the year,’ and ‘Off-Grid Energy Supplier of the year.’