Dar es Salaam, Tanzania, 02 February 2015
— IFC, a member of the World Bank Group, today announced new financing
to help expand the reach of Off Grid Electric, a solar leasing company
in Tanzania. Off Grid Electric provides home solar electric systems to
consumers in rural and urban Tanzania, which can be operated via mobile
phone. The company’s expansion plan aims to reach 200,000 households in
Tanzania by the end of 2015.
The new facility consists of a $4.5 million loan provided through the IFC
Cleantech Innovation Facility and an additional $2.5 million loan from
Cordiant Capital of Montreal, Canada. Launched in 2012, the Cleantech Innovation
Facility promotes green innovation and transfer of clean technologies to
developing countries. Investments target companies that offer products
or services to mitigate carbon emissions. The facility is jointly funded
by IFC and the Global Environment Facility. The Global Environment Facility
is a partnership where 183 countries work with international institutions,
civil society and the private sector to address global environmental issues.
“IFC’s backing and expertise will help us bring affordable power to millions
of people across Africa,” said Xavier Helgesen, Off Grid Electric’s CEO,
“We look forward to continuing this important work IFC’s support.”
Off Grid Electric is unique in allowing customers to make payments in small
increments, building ownership and credit history while lighting their
homes as soon as service is established. For a $6-10 installation fee,
the company provides customers with a solar home system that includes panels,
lithium batteries, lights, and a meter. To use the system, customers send
a mobile payment and receive a passcode via text message to unlock their
energy. The company has distributed nearly 35,000 solar home systems
in the Arusha, Kilimanjaro and Mwanza regions.
The need for renewable energy is urgent in Tanzania, where each year, low-income
households spend over $900 million to meet their lighting, cooking and
mobile charging needs. Many use kerosene to fuel their lamps and
back-up generators. Solar energy offers a cleaner, longer-lasting alternative
to kerosene fuels, which contribute heavily to greenhouse gases. Off Grid
Electric offers a low cost model for households looking to switch from
kerosene to solar, reducing the upfront cost to customers and minimizing
the risks associated with maintenance and repair. Families can opt
to top up their solar systems in small increments, in line with their finances.
Oumar Seydi, IFC Director for Eastern and Southern Africa said, “As developing
countries move to a greener, low-carbon growth paths, the private sector
will play a critical role in expanding access to energy. IFC supports the
innovation of Off Grid Electric, which provides low-cost, clean energy
solutions to the millions of people in Africa not connected to the grid.”
Promoting access to clean energy is a priority for IFC. Over the
past eight years, IFC has invested $11 billion in renewable energy and
other climate-smart solutions in developing countries.
IFC, a member of the World Bank Group, is the largest global development
institution focused exclusively on the private sector. Working with private
enterprises in about 100 countries, we use our capital, expertise, and
influence to help eliminate extreme poverty and boost shared prosperity.
In FY14, we provided more than $22 billion in financing to improve lives
in developing countries and tackle the most urgent challenges of development.
For more information, visit www.ifc.org
About Off Grid Electric
Off Grid Electric provides pre-paid solar energy via mobile money – “solar
as a service” – that makes an aspirational modern energy lifestyle accessible
and affordable. The company designs, manufactures, installs and maintains
solar home systems that provide modern electrical services to households
that do not have access to electricity. Service levels start below the
cost of kerosene and grow with household needs with customers paying as
little as a day at a time. The company is based in Arusha, Tanzania. For
more information, visit www.offgrid-electric.com
About the Global Environment Facility
The Global Environment Facility (GEF) is a partnership for international
cooperation where 183 countries work together with international institutions,
civil society organizations and the private sector, to address global environmental
issues. The GEF serves as financial mechanism for the United Nations Framework
Convention on Climate Change, the Convention on Biological Diversity, the
United Nations Convention to Combat Desertification, the Stockholm Convention
on Persistent Organic Pollutants and the Minamata Convention on Mercury.
It also works closely with the Montreal Protocol on Ozone Depleting Substances.
Since 1991, the GEF has provided $12.5 billion in grants and leveraged
$58 billion in co-financing for 3,690 projects in 165 developing countries
to support activities related to biodiversity, climate change, international
waters, land degradation, and chemicals and waste in the context of development
projects and programs. For more information, visit www.thegef.org