M-KOPA, a pay-per-use solar energy provider targeting customers who are not connected to the national electricity grid, has closed a Sh1.9 billion ($19) million financing round led by London-based group of investors.
The firm on Thursday said the new investment from Generation Investment Management LLP and others will be used to further expand the company’s management team, product range and international operations.
The Generation Investment Management, founded by former US Vice President Al Gore together with David Blood, led the financing round, which also includes new investments by Sir Richard Branson, (founder of Virgin Group), and Jean and Steve Case (founder of AOL) as well as re-investment by existing shareholders.
In just three years since commercial launch, M-KOPA has connected more than 280,000 homes in Kenya, Tanzania and Uganda to solar power.
The firm says it is still on course to reach its initial target of one million homes in East Africa by end of 2017.
This is the fifth financing round the company has made since launch.
“We’re very pleased to have the world’s leading sustainability investors and entrepreneurs backing us at M-KOPA,” said Jesse Moore, the M-KOPA CEO and Co-founder, in a statement.
“We’re proving that solar power for the off-grid world will be transformative for customers, good for the planet and profitable for investors.”
M-KOPA provides off-grid customers a way to benefit from solar power on their own roof. It comprises a solar battery-powered home system — which includes two bulbs, a phone-charging facility and a chargeable radio.
Currently, poor Kenyan households spend up to 10 per cent of their monthly income on energy, according to a recent study by the International Finance Corporation (IFC).
The IFC study notes that turning to renewable energy sources in Kenya, especially solar, can increase the coverage of energy demand substantially, and potentially release funds for other domestic needs in the homes.
Buyers own the M-Kopa solar kit once they are done paying the daily fee of Sh40 over a period of 365 days through M-Pesa.
Colin le Duc, partner at Generation Investment Management said with 1.3 billion people currently off-grid, M-KOPA’s innovative model means that modern solar-powered appliances can be made affordable to a huge new market.
“Under the stewardship of an outstanding management team, we believe that M-KOPA has consistently demonstrated its role as a global leader in terms of robust technology, market traction and scale,” said Mr Colin.
“In addition to attractive long-term financial returns, this brings clear climate advantages and financial savings for low-income customers,” he added.
M-KOPA has been recognised globally for scaling up its pay-as-you-go solar offering, including winning the 2015 Zayed Future Energy Prize and being selected by Fortune Magazine as one of the Top 50 Companies Changing the World.