M-Pesa linked solar firm gets Sh1.7bn from CBA, Bill Gates
Safaricom CEO Bob Collymore (right) with M-KOPA boss Jesse Moore at the launch of solar kits in Eldoret in 2012. Photo/Jared Nyataya
What you need to know:
The bank will lend Sh860 million through syndicated loans with Sh473 million coming from the Bill and Melinda Gates Foundation, its first debt to an enterprise in Africa. The remaining share of the loan will come from LGT Venture, Imprint Capital and Netri Foundation.
M-KOPA, a start-up based in Kenya, provides a solar power system that consists of a panel, three lamps, radio and mobile phone charging kit.
M-KOPA, which started operations 15 months ago, has 50,000 customers and wants to use the Sh1.72 billion loan to grow its clientele base to one million homes by 2018.
M-Pesa-linked solar dealer, M-KOPA, has received a Sh1.72 billion loan from Bill Gates and Commercial Bank of Africa to light rural homes that lack electricity.
The bank will lend Sh860 million through syndicated loans with Sh473 million coming from the Bill and Melinda Gates Foundation, its first debt to an enterprise in Africa.
The remaining share of the loan will come from LGT Venture, Imprint Capital and Netri Foundation.
M-KOPA, a start-up based in Kenya, provides a solar power system that consists of a panel, three lamps, radio and mobile phone charging kit.
Buyers pay Sh2, 999 upfront and then settle the balance in daily instalments of Sh50 using their mobile phones for a year, bringing the overall cost to about Sh20,999.
As long as they keep making payments via M-Pesa, the system provides free light and power, and eventually they own it outright.
M-KOPA, which started operations 15 months ago, has 50,000 customers and wants to use the Sh1.72 billion loan to grow its clientele base to one million homes by 2018.
“Funds are being used to scale up sales and operations in East Africa, expansion into other markets, research and development as well as business intelligence,” said Jesse Moore, M-KOPA co-founder and managing director.
“We know Kenyans spend over Sh86 billion a year on kerosene. We also know Kenyans would prefer brighter, healthier and safer alternatives. We’ve developed our technology and business model precisely to meet that consumer needs.”
Mr Moore co-founded M-KOPA with Nick Hughes who helped develop M-Pesa, which has more than 17 million users in Kenya, has spawned imitators in many countries.
Mr Hughes wants to apply the same thinking to lighting. The solar start-up accounted for one million M-Pesa transactions in which Safaricom earns undisclosed fee for every deal.
Mr Moore said that penetration of solar energy use in Africa was still very low and expects that M-KOPA will enable low income population access affordable home lighting.
The number of Kenyans connected to the national electricity grid is below 30 per cent, leaving many households to rely on kerosene for lighting.
“We are not just lighting homes, but also enabling children to do their homework at night as well as providing convenient unlimited mobile charging at home,” says Bob Collymore, Safaricom CEO.
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