NVI Energy's Solar4Africa: 'One-stop-shop' funding

In February, the Tortilis Camp project in Kenya celebrated its first six months in operation. Owned by Cheli and Peacock, Tortilis Camp is a safari camp in East Africa and is, according to the claims of its owners, now fully-powered by solar.

That solar was installed by Harmonic Systems and replaced the two fossil-fuel generators that had previously been used. 190 PV modules were installed on site, with predictions that they would supply up to 77,400 KWh annually. Battery storage is provided by a 11-ton Hoppecke bank.

Financing for the project was set in place by NVI Energy through its Solar4Africa (S4A) platform. Launched in 2014, S4A’s approach to tackling the problem of financing is to supply a "one stop shop" for industrial and commercial customers wishing to have solar installed.

Elizabeth Muir, head of communications and human resources at NVI Energy, says that there were not many companies across Africa supplying this kind of service. Pay-as-you-go PV in parts of Africa is, however, currently being provided in the residential offgrid space by companies such as M-Kopa Solar and Azuri Technologies.

"If you are a flower farmer in Kenya and want solar, you may be put off by huge upfront costs, issues of affordability, deciding on who you want to implement it, maintenance, etc."

Muir says that NVI Energy has developed three approaches to tackle this challenge.

"We have ‘pay by solar,’ where someone rents to own the system where we ask only a minimal upfront cost and take on up to 85% of the price of building. The customer pays for the power produced, and then they own the system at the end of the period. Secondly, there’s the PPA. Or we can do development services where they can buy the system outright,” said Muir.

Muir says that this approach arose from conversations with installers. "One issue they came up with consistently was that they had opportunities but when they spoke about cost, the customer said that they couldn’t afford it. So the installers were having possible sales but couldn’t provide financing solutions. What we do is partner with them and provide those solutions."

The concept of S4A is to provide a middle ground where customers, investors, and solar companies can do business together. NVI Energy claim that they have a strict vetting process across each sector. Speaking about the process for customers, Muir says, “The risk is that we could be signing someone for up to a decade and need reassurance that they will be paying us over that time. We will look at their industry as a whole and the risks in that industry. We will look at financial statements and do the normal due diligence on anyone signing up. We may even speak to some of their suppliers if we felt it necessary."

This process, says Muir, helps reduce the risk in supplying a long-term solar PPA.

The vetting process is extended to technical partners, which include New Southern Energy and Harmonic Systems. David McDonald is the technical director and co-founder of NVI Energy. In respect of the technical partners, he says that due dilligance is also carried out with technical partners.

"As one would expect, there was minimal additional due diligence work required for the more established solar PV firms. However, with the smaller or newly established firms, Solar4Africa generally requires that these firms reassess their current business processes, we encourage them to adopt certain policies, we suggest possible ways for necessary skills transfer and we assist with local law compliance in order to ensure that they meet our quality standards.”

NVI Energy says that it factors in its profit when providing the costs given to installers, who in turn add in their own margins. With a number of projects in the process of being built, including Africa largest solar carport, which is to be built in Nairobi, it will be interesting to see if this model of three-way cooperation truly takes off.