The funds secured by Zola – formerly Off Grid Electric – will be used to expand the company’s off-grid electric service delivery operations, aiding an estimated 145,500 off-grid households. According to an FMO press statement, the investment should generate over 2,000 new jobs in off-grid solar, while tackling energy poverty and boosting village economies.
“The off-grid sector is developing fast and receiving increased attention from investors, but is still perceived as high risk; few players have reached profitability,” said fund manager of the Access to Energy Fund (AEF), managed by FMO Rosemarijn van der Meij.
“Zola Electric Tanzania has a dedicated and professional management team and is well on the way on its path towards profitability. This transaction fits FMO’s inclusive business and green strategy as well as the core theme in the strategy of the Access to Energy Fund: providing access to energy for the unreached rural communities,” she added.
Off grid-solar has been shown to improve wider issues, such as health through improved lighting and heating conditions and education levels in Africa; one of the key innovations for Zola is developing a profitable model that can still capitalise on these social benefits.
Over 2.2 billion people still live in energy poverty and energy access companies, such as Zola offer a solution to myriad issues, such as health, education and poverty using off-grid solar to empower communities in countries lacking vital energy infrastructure.
Household level solutions are complemented by mini-grids, two EU-backed projects of which are in the pipeline for Tanzania, whilst in further good news for Tanzanian energy access, the U.K. this week announced that $126 million will be provided for small-scale energy solutions in Sub Saharan Africa.