PEG Africa, a pay-as-you-go (PAYG) solar firm with operations in Senegal, Ghana and Ivory Coast, has raised $5 million from ElectriFI to continue rapid growth in existing markets.
The funding from ElectriFI is subordinated junior debt and will be used for growth in PEG’s existing markets.
“PEG has almost doubled in size every year since 2015,” said CEO Hugh Whalan, “and the fact we are now able to raise a significant amount of our funding in debt demonstrates that our approach is financially sustainable. We are delighted to work with ElectriFI to further accelerate our growth.”
Via its PAYG financing model, PEG Africa enables customers to reduce reliance on harmful fuels such as kerosene and diesel with affordable solar energy systems.
PEG is currently serving 400,000 daily users in Ghana, Cote d’Ivoire and Senegal, and has recently expanded into solar water irrigation and bigger solar power systems.
Dominiek Deconinck, ElectriFI fund manager, said the ElectriFI initiative was thrilled to support PEG Africa on its growth path.
“With 82.000 direct new connections by the end of 2019, together adding not less than 1.7 MW with Solar Home Systems, ElectriFI’s investment in PEG will strongly contribute to improving quality of life through renewable energy in the markets it operates in,” he said.
ElectriFI’s innovative financing is catalysing the financing by UK DFI, CDC group, who together with SunFunder, provided a US$15 million senior secured debt facility in local currency earlier in 2019.
In April, PEG completed a $25 million Series C round from existing and new investors to take its total raised to date to US$50 million. PEG said it was going to use the investment to cement its position as a market leader in Ghana, Cote d’Ivoire and Senegal.
US$20 million of this round is in debt, with CDC Group, the UK’s development finance institution arranging a $15M multi-currency facility. CDC is joined by existing lenders SunFunder and ResponsAbility. The remaining US$5 million comes in the form of equity investments from existing investors, Energy Access Ventures, Blue Haven Initiative, I&P Afrique Entrepreneurs and Acumen, 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 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 per cent of their incomes on poor quality, polluting and sometimes dangerous fuels like kerosene, candles and batteries.