M-Kopa, the U.S.-based provider of off-grid solar systems financed on a pay-as-you-go basis, has this week secured equity investment of $19 million from London-headquartered investment vehicle Generation Investment Management.
The closing of this latest financing round will assist M-Kopas aim of reaching one million homes in East Africa by 2017. The startups leapfrop solar model installs solar PV arrays atop roofs in Africas more rural, remote and off-grid regions.
The innovation comes via the payment model, whereby local residents can pay for the solar energy on a pay-as-you-go basis, thus lowering the initial investment barriers for thousands of Africans hitherto reliant on expensive and polluting kerosene for their energy needs.
The involvement of Generation Investment Management, which was founded by former U.S. VP Al Gore and has backers that include Sir Richard Branson and AOL founders Jean and Steve Case, is something of a coup for M-Kopa, and a ringing endorsement of how innovative financing in Africa can help sow the solar seed further.
"Were very pleased to have the worlds leading sustainability investors and entrepreneurs backing us at M-Kopa," said M-Kopa CEO and co-founder Jesse Moore. "Were proving that solar power for the off-grid world will be transformative for customers, good for the planet and profitable for investors."
Generation Investment Management partner Colin le Duc added that M-Kopas innovative model in using solar power to bring affordable energy to a huge and underserved market will go some way towards ending fuel poverty among more than 1.3 billion people worldwide.
"In addition to long-term financial returns, this brings clear climate advantages and financial savings for low-income customers," said le Duc.
In its first three years M-Kopa has reached more than 750,000 homes across three countries in East Africa: Kenya, Tanzania and Uganda. Its solar home systems are made available to low-income households, which pay a deposit of just $30, followed by 365 daily mobile money payments of 50 cents less than they would spend on kerosene. After the end of the payment plan, the household then owns the system outright, and is offered the chance to upgrade for more power.