West Africa-based pay-as-you-go (PAYG) solar company, PEG Africa, has raised a US$25 million Series C funding round, bumping up its total funding to US$50 million so far, which allows it a firmer grip on the pioneer and market leader in the region with regard to PAYG solar energy.
The firm provides credit for assets such as solar systems to under-served households in West Africa via its PAYG model.
The Series C round has been collected from both new and existing investors. PEG intends to use the funds from this round to expand its operations beyond Ghana, Cote d’Ivoire and Senegal.
US$20 million of this round is debt, with UK-based CDC Group arranging a $15M multi-currency facility. Alongside CDC are SunFunder and ResponsAbility, both of whom are existing investors. The remaining US$5 million comes is equity investment from the other existing investors, Energy Access Ventures, Blue Haven Initiative, I&P Afrique Entrepreneurs 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.
PEG Africa CEO, Hugh Whalan said, “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.” He continued, ” 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 per cent of PEG’s customers earn less than US$3 per day, while 89 per cent do not have access to the national electricity grid, and 82 per cent never received financing or access to credit before PEG entered their lives.’
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CDC Managing Director Holger Rothenbusch said, “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.”
As of this year, PEG serves over 60,000 households through 70 service centers, over 400 full time staff and 550 commission based sales agents.
