Yellow Malawi, a prominent company specializing in the distribution of solar energy, has recently obtained a significant financial boost in the form of a $2 million investment from the Hardest-to-Reach (H2R) initiative, which is managed by Acumen. This substantial infusion of capital is earmarked for the enhancement of Yellow Malawi’s inventory of solar home systems, with the objective of extending energy access to an estimated 182,000 individuals. Notably, this initiative will enable 145,000 people to experience the benefits of electricity for the very first time in their lives.
The investment is structured to be distributed in two separate phases for optimal financial management. The initial phase involves the release of $1 million, which will be provided in US dollars. However, the repayments for this phase will be conducted using the local currency, the Malawian Kwacha. To alleviate the financial burden associated with currency hedging, a subsidy facilitated by the TCX EU Market Creation Facility will be applied.
The subsequent phase of the investment will maintain consistency in currency, with both the disbursement and repayment being conducted in US dollars. This strategic financial arrangement is designed to help Yellow Malawi navigate the complexities of foreign exchange risks, thereby supporting the company’s sustained growth trajectory.
Maya Khonje-Stewart, who co-founded Yellow Malawi alongside Mike Heyink, underscored the significance of their partnership with Acumen. She emphasized that the Hardest-to-Reach initiative’s deep understanding of the local conditions has led to the creation of a financing solution that is not only tailored to Yellow Malawi’s specific requirements but also aligns with their overarching mission to broaden the scope of energy access in Malawi.
Malawi’s energy landscape is characterized by substantial challenges, with a mere 11% of the population having access to electricity. The disparity between urban and rural electrification is stark, with 42% of urban dwellers having power, in contrast to a paltry 4% of rural households. Since its inception in 2018, Yellow Malawi has been dedicated to addressing this gap by providing solar home systems and mobile phones to those living in rural and off-grid areas.
To date, Yellow Malawi has reached over 530,000 customers with its energy solutions and has facilitated connectivity for 62,000 individuals through the provision of smartphones. In the year 2023, the company successfully raised $14 million in a Series B funding round, which is intended to support its ambitious expansion plans into neighboring countries such as Rwanda, Uganda, Zambia, and Madagascar. Additionally, the funds will be utilized to introduce new digital and financial products to its offerings.
The Hardest-to-Reach initiative by Acumen, which commands a $250 million fund, is committed to fostering the adoption of clean energy in underserved markets across 16 African nations, including Malawi. In conjunction with its investment in Yellow Malawi, the H2R initiative has also allocated $1.25 million to RDG Collective, a Zambian enterprise engaged in solar energy distribution.
This investment is projected to bring energy access to 66,000 individuals and equip 180 small businesses with solar generators, thereby stimulating local economic development. Through these calculated and impactful investments, Acumen’s Hardest-to-Reach initiative is steadfast in its pursuit to illuminate some of the most energy-deprived regions in Africa with the power of clean energy.
