More from: Solar Home System

Arc’s REMMP Partner Simpa Networks Raises US$4m in Commercial Debt Financing to Expand in Uttar Pradesh

Simpa Networks, one of Arc Finance’s partners under the USAID-supported Renewable Energy Microfinance and Microenterprise Program (REMMP), has successfully raised $4M from the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, and from GDF Suez, through their Rassembleurs d’Energies program.

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With support from Arc Finance, which was Simpa’s very first investor, Simpa created a pay-as-you-go solar business model enabled by its proprietary metering technology. Simpa sells solar-as-a-service to energy-poor households and micro-enterprises in rural India. Simpa will use the new finance to expand its reach from a current base of 25,000 beneficiaries to up to 200,000. The scale of the future opportunity is considerable, as an estimated 400 million people in rural India still do not have access to an electricity grid.

As Paul Needham, Simpa’s President and Co-Founder, tells it, distributed solar-powered electricity systems are dramatically improving the quality of life for energy-poor families while promoting economic activity by enabling small businesses to extend their working days. This new debt investment – the first of its kind in India – will help Simpa scale its for-profit solution to the problem of energy poverty, and vindicates Simpa’s and Arc’s belief that clean electricity for rising rural India is an investible, scalable and sustainable proposition.

“Support from Arc Finance has been instrumental at several stages of our development,” said Paul Needham. “Arc Finance initially provided seed capital to help us pilot our solar-as-a-service model, and it was Arc Finance, under the REMMP program, that helped us improve our credit models and processes so we can scale up.”

Simpa operates in rural Uttar Pradesh, an Indian state with a severe power deficit. This unprecedented new debt facility will enable Simpa to reach hundreds of thousands of “energy poor” households with clean, reliable electricity services, in a business with high working-capital demands. Simpa’s tested model – a patented technology platform that integrates a meter into a complete solar home system and includes after-sales support – has already provided over 770,000 energy days equivalent, delivered over 65 MWh, created over 2,800 full and part time jobs in rural India, and saved over 75 tonnes of CO2 equivalent emissions.

Simpa operates in India as Simpa Energy India, and has pioneered the solar-as-a-service business model. Simpa customers make a small initial payment for a solar electric system installed in their home or business. Customers then purchase “energy days” using a prepaid or pay-as-you-go mobile payment system. Upon completion of the contract, customers own their systems, affording them free, clean electricity for the rest of the system’s life.

Elizabeth Littlefield, OPIC’s President and CEO is a big supporter of what Simpa is trying to do. She has said that “The kind of technological leap Simpa and like-minded innovators are achieving proves that off-grid, clean energy in emerging markets is not merely viable, but a true opportunity both financially and environmentally.”

For GDF Suez, in Simpa there is an opportunity to help a growth-stage company scale up its impact to reach tens of thousands more people with affordable, clean, renewable electricity. Says Jérôme Broutin, CFO of the company’s Rassembleurs d’Energies program: “We invest in for-profit solutions that can scale to meet this challenge.”

We at Arc Finance are enormously proud of the growth and innovation at Simpa, which alongside several other partner organizations across India, Uganda and Haiti, is testing and demonstrating the viability of a variety of sustainable business models for solving affordability and distribution challenges in small-scale clean energy. We are thrilled that Simpa has been able to close this debt round, and look forward to working with Simpa as it passes many more milestones in the future.


Going “All in” on Solar Finance: How IDCOL Incubates a Growing Industry in Bangladesh

IDCOL and Solar Home Systems in Bangladesh

While demand for small-scale renewable energy is virtually infinite, a small microfinance institution or energy enterprise needs capital to meet that demand with supply. The Infrastructure Development Company Limited (IDCOL) addresses this barrier to scale in a unique and exciting way. With massive infusion of government capital, management from the private sector and a unique asset finance model using creative partnerships, IDCOL has produced a stunningly successful program.

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