FSD Africa invests in renewable energy financing intermediary
FSD Africa Investments (FSDAi), the investing arm of FSD Africa, has invested $4.5 million in Nithio FI, a renewable energy financing intermediary focused on the pay-as-you-go (PAYG) off-grid solar sector, to provide reliable and sustainable renewable energy solutions for households and small businesses in Kenya, Nigeria and Uganda.
Nithio Holdings is an AI-enabled energy financing platform whose mission is to standardise credit risk assessments and therefore drive more capital to the sector, including by investing directly and efficiently in off-grid solar companies. Over the next five years, Nithio FI aims to provide financing to more than 224,000 energy access products across the continent, including solar home systems and productive use appliances.
Through the FSDAi’s investment, Nithio FI’s innovative approach will unlock capital for renewable off-grid energy in Africa, supporting access to energy for households, smallholder farmers, and micro-entrepreneurs that would otherwise struggle to meet the costs. This increased access to clean energy will enhance approaches to countering climate change and promote sustainable development. This will be achieved by leveraging Nithio FI’s innovative approach which integrates repayment data and geospatial population mapping into its AI models to produce a standardised credit risk assessment and forecast of cash flows. Nithio FI leverages this data to inform its investment decisions, directing capital to scalable, sustainable solutions to Africa’s renewable energy access challenge. Nithio FI currently provides receivables-backed financing in Nigeria, Uganda, and Kenya, with planned expansion in 2022.
FSDAi’s investment complements Nithio FI’s total raise of $23 million. This comes alongside $5 million from ElectriFi and a commitment of $10 million from the U.S. International Development Finance Corporation (DFC). This complements the commercial equity supplied by Nithio Holdings. Combined, these investments will enable Nithio FI to demonstrate the data-driven model, lend to operators in key markets, and unlock additional capital. By end of 2021, Nithio FI aims to raise an additional $25 million.
Additionally, Nithio Holdings also recently raised more than $7 million to scale its operations and data analytics. The round was led by TPG’s The Rise Fund in partnership with Kupanda Capital, joined by Emerson Collective and Powerhouse Ventures.
Adding to the announcement, Anne-Marie Chidzero, chief investment officer, FSD Africa Investments said, “Innovation must play a central role in closing the power gap in Africa. By leveraging the technical and analytical capabilities of Nithio, we are ensuring that those communities that are most in need are provided priority access to renewable electricity. With renewable energy emitting the least greenhouse gases and air pollutants, both the planet and our health will benefit from the investment in greener power sources.”
In response to the announcement, Héla Cheikhrouhou, Nithio co-founder and CEO commented, “In order to achieve universal energy access by 2030, last-mile financing must scale to the billions. Nithio has developed an innovative approach powered by its Risk Analytics Engine to lend to small, medium, and large off-grid energy operators to drive scalable connectivity. We are excited to work with FSD Africa Investments to achieve this goal.”
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