€2 million equity investment lays groundwork for scaling renewable energy asset finance and distribution in East Africa
SolarNow, the Uganda-based solar asset finance company, has closed its most recent equity round, raising €2 million from Novastar Ventures and Acumen, to help meet massive demand for high-quality solar technology in East Africa.
Providing a range of modular 50-500 Watt solar home systems and DC appliances through a franchise model to mainly rural customers in Uganda, this investment will enable SolarNow to expand its branch network, further upgrade its Management Information System (MIS), and invest in R&D.
Willem Nolens, CEO of SolarNow, says that with this investment, SolarNow will focus on fulfilling the growing demands of its existing clients, expand to under-served areas of the country, and prepare for expansion into other East African markets in the medium term.
“Our business has high working capital demands. The more we sell the more money we need. We are buying the best components and selling them to low-income customers, with just a 20 percent deposit payment. However, this does mean a company like ours needs a steady and ready supply of capital, both to finance the systems before installments are complete, but of course also to plan for future expansion. Equity can stimulate further debt capital, and so this equity investment by two partners who share our vision, is so welcome. It will allow us to do what we are doing, better, and to do it with many more people.”
“We see Novastar Ventures and Acumen’s support as a great acknowledgment of our business model, and a shared assessment of the future plans we have. We’re not just a solar product company or a pay-as-you-go service provider; we are an asset finance and distribution company with a focus on renewable energy. Bringing together affordability and distribution with great products is what justifies this trust,” Nolens concludes.
Mauritius-based Novastar Ventures and US-based Acumen have invested €2,000,000, based on what they believe to be a great opportunity for scale into the region and product diversification.
Andrew Carruthers of Novastar Ventures said: “We are impressed by SolarNow’s well-developed distribution network as well as the quality of equipment and service they provide. They raise the bar for low-income customers in terms of affordability, reliability and service guarantees. We look forward to working with them to scale rapidly into this poorly served market.”
Duncan Onyango, East Africa Director at Acumen said: “We are excited about our investment in SolarNow, a company whose solar products clearly improve the lives of rural households in Uganda.”
A recent update has been published to a 2012 Case Study written by Arc Finance, which is supporting SolarNow under the USAID-funded Renewable Energy Microfinance and Microenterprise Program (REMMP). This case study update, which provides more information on SolarNow’s business model and strategy, can be found at Arc Knowledge.