French oil and gas giant Total has made further inroads into the clean energy industry with the purchase this week of a stake in two ambitious startups operating in the solar power sector.
Total has used some of the funding available via its $150 million Total Energy Ventures (TEV) venture capital fund to acquire a small stake in Tanzania- and California-based Off Grid Electric, and a stake in Powerhive, also based in California.
The exact values of the deal were not disclosed, but a spokesperson for Total said that the deal involved no more than a 15% share in either company, and would typically be worth somewhere between $1 million and $5 million.
A statement released by Total Chief Executive Patrick Pouyanne describing why the firm went after these two particular startups revealed: "Their systems are expected to speed up electrification in Africa and could be as much a game-changer as mobile phones were in their field."
Off Grid Electric which last month won the Zayed Future Energy Prize in at the World Future Energy Summit (WFES) for the Small and Medium Enterprise category in December secured $45 million in investment from private sources and the U.S. Agency for International Development (USAID).
Its model provides affordable solar+storage kits to underserved and remote areas of Tanzania and Rwanda via a pay-as-you-go mobile platform. Speaking to pv magazine after the WFES award, Off Grid Electric CEO and co-founder Xavier Helgesen explained the thinking behind the model.
"The number one thing that keeps solar from being adopted more widely is that people are expected to pay for a lifetime of energy in one go. But if people in Tanzania and Rwanda can pay for their solar energy via their savings of income over a period of time, it becomes a very easy decision to go for solar," Helgesen said.
Californias Powerhive, which installs and operates microgrids to power villages in rural Kenya, also raised $20 million in funding last month as investors are increasingly sold on its business model.
Totals involvement with these two startups takes the number of investments made under its TEV to 20. The company plans to invest around $500 million in clean energies annually as it seeks to hit its goal of 10% renewables in its energy mix by 2030. Currently, renewables account for just 3% of Totals power production capability.