A rather impressive group of clean energy investment companies recently made a $20 million venture capital (VC) investment in BBOXX, a start-up based in Rwanda whose installed base of more than 70,000 Solar Smart off-grid solar/distributed energy management systems is distributing emissions-free electricity to some 350,000 people in 35 countries, and counting.
The willingness of prominent investment groups to invest in young, innovative Sub-Sahara Africa-based solar/cleantech companies is a testament to the effectiveness of multilateral sustainable energy development initiatives, such as Power Africa and the U.S. Africa Development Foundation's (USADF) Off-Grid Energy Challenge, to attract and leverage international private-sector investment.
Key to it all is clean energy entrepreneurs' ability to combine small-scale solar PV, battery-based energy storage, mobile telecoms and “pay as you go” business models to create safe, reliable and affordable distributed clean energy distribution systems in a way that creates local economic opportunities and improves life in communities throughout sub-Saharan Africa and other developing or less-developed countries. BBOXX serves as an illustration.
Sub-Saharan Africa's Growing Number of Solar Powered Rural Communities
Launched in 2010 with an operational headquarters currently under construction in Kigali, Rwanda's capital, BBOXX off-grid solar energy systems collectively are delivering quantities of electricity to rival that of Rwanda's entire power grid infrastructure.
Nearly 25 percent of urban Rwandans had access to grid power as of 2015. That drops to 1.3 or less in rural areas and less than 5 percent nationwide. Furthermore, an estimated 98 percent of rural residents and more than 92 percent of Rwandans nationwide rely on wood for cooking fuel, a key factor in the country's deforestation. Rwanda: Energy Profile
Affordable access to solar electricity can alleviate this and other substantial socioeconomic and environmental threats and pressures. By year-end 2016 BBOXX anticipates its Smart Solar energy systems will be distributing electricity to more than 20 percent of Rwanda's population.
The typical BBOXX customer lives in a rural area that lacks access to grid power. Most in Kenya and Rwanda are small-hold farmers growing crops sold on global commodity markets, such as coffee or vanilla beans. Others living in rural areas such as around Africa's Great Lakes are fishermen who rely on catches of tilapia, Nile perch and other common speicies, BBOXX explains.
They typically earn US$100-$200 per month and spend $8-12 on energy purchases, such as kerosene, batteries, and charging their phones. Key to BBOXX's commercial success, it works through a direct, local sales force and prices its Smart Solar electricity products and services to match the costs of these preexisting energy sources.
A New Type of Energy Services Company
“BBOXX is building the next generation of energy services – connected, distributed, renewable and focused on customer service. We see a strong opportunity for BBOXX’s licensed products and services to act as a foundation for a rapidly growing new sector in the global utility market” said Patrick Bennett, VP at MKB (MacKinnon, Bennett & Co.), one of the investment groups that participated in the latest and previous BBOXX private equity funding rounds.
The UNFCCC (United Nations Convention on Climate Change)/World Bank-managed Green Climate Fund (GCF) and multinational electric utility and energy services group Engie also participated in BBOXX's latest, Series C VC funding round. Having invested in earlier funding rounds, MKB, Khosla Impact Fund, Bamboo Finance and DOEN Foundation increased their investments in BBOXX.
Investing in BBOXX also marked the first investment for KawiSafi Ventures, a $100 million private equity fund focused on investing in off-grid energy in Africa. “We have built an innovative, data-powered technology platform for the next generation of distributed utility companies,” said CEO Mansoor Hamayun. “We are thrilled to have ENGIE Rassembleurs d’Energies, KawiSafi Ventures and MKB as our lead investors – it will bring credibility to our industry and much needed scale,” BBOXX CEO Mansoor Hamayun commented.
“We are already deploying systems at the fastest rate in East Africa, at 10kWp (kilowatts-peak) of solar per day, and I am excited that we will continue to grow quickly over the next few years.”
BBOXX intends to use the new capital to expand its presence in Kenya and Rwanda, where the privately held company owns and operates retail distribution networks and after-sales service centers. It also will enable management to accelerate licensing of BBOXX products and services in new markets. That includes establishing franchises in the West African countries of Cameroon, Ivory Coast and Nigeria.
“We are excited about the growth potential for the African off-grid solar market and delighted with BBOXX’s rapid development” Laure Vincotte, managing director of ENGIE Rassembleurs d’Energies, was quoted in a news release. “We feel that BBOXX’s technology is fully in line with ENGIE Rassembleurs d’Energies’ objectives of promoting sustainable and scalable energy solutions for all”. comment↓
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