Project supports all countries' (except Senegal's) NDC targets to reduce GHG emissions by 2030 and increase use of renewables. It also contributes towards Cote d’Ivoire’s target to provide universal energy access by 2020 (National Renewable Energy Action Plan, 2016), Mali’s 70% energy access by 2030 target (New Energy Policy, 2015) and Senegal’s target for 81.6% electricity access in rural areas by 2023 (Priority Action Plan 2019-2023, 2018). In Ghana, the project supports the Renewable Energy Master Plan (2019) target of adding 200MWp of distributed solar by 2030 and the Strategic National Energy Plan (2006) objective of 30% rural electrification by renewables by 2020.
Hundreds of thousands of people living with poor or no access to electricity in West Africa look set to receive clean energy access for the first time thanks to the region’s leading credit provider for solar assets.
As of the start of 2019, PEG Africa had reached 60,000 homes and businesses in Ghana, Cote d’Ivoire and Senegal, enabling customers to purchase solar energy systems on credit instead of continuously spending their money on polluting and expensive fuels such as kerosene.
Now the Ghana-based company is on track to finance and install a further 60,000 systems, and open a fourth market in Mali following a successful US$25m Series C funding round.
During the round, REPP provided US$1.1m in equity financing, matched by integrated energy company Total Energy Ventures, with further commitments from existing shareholders. The remaining US$20 million has been provided in the form of debt, led by UK-owned DFI, CDC Group investing $15m.
Scaling up PEG’s operations is expected to provide a raft of economic, environmental and health benefits for the region’s rural communities, where off-grid households are currently spending US$14 – US$20 per month on kerosene, candles, batteries and phone charging.
The typical solar system that PEG provides credit for include a solar panel, control box, phone charging kit, five LED light bulbs with cables and switches, an LED rechargeable torch, a rechargeable radio and a 19” television. Bigger systems include fans, more lights and larger televisions, and PEG is also starting to leverage its credit knowledge to offer solar water pumps to underserved smallholder farmers.
Through the asset-based financing scheme, PEG’s customers – who lack formal banking services – make small incremental repayments via their mobile phones to acquire, use and finally own the solar device. If customers default on the loan, the assets are automatically switched off remotely until the customer starts paying again.
Sales agents are paid a portion of their total commission upfront, and the remainder over the next six months of the loan term, dependent on customer repayment status. If customers default the commission is clawed back, which incentivises agents to find trust- – and credit- – worthy customers, as well as to deliver ongoing product support.
Contracted date: 5 October 2018
Lending type: Equity
REPP funding: US$1,100,000
PEG is delighted to have received an investment from REPP. The management team have deep experience in innovative financing approaches for energy, and we are looking forward to learning from them.- Hugh Whalan, Group CEO, PEG Africa