UK Aid invests £1.6 m in Energise Africa to improve energy access
UK Aid is set to invest £1.6 million of capital into Energise Africa to improve access to energy across sub-Saharan Africa and improve the lives of over 11 million people, while boosting UK business opportunities.
Launched in 2017 by Europe’s leading online impact investing platforms Lendahand and Ethex, with support from UK Aid and Virgin Unite, Energise Africa has so far raised £4.8 million from 1,000 investors to help more than 195,000 people in Africa access affordable solar energy.
The platform enables UK investors to invest in early stage businesses that provide solar technologies to homes, schools, hospitals, and farmers – boosting vital services and economies in sub-Saharan Africa, whilst aiming to generate up to a 6% annual return for investors. Investors are also be able to benefit from tax free returns by holding their Energise Africa solar investments within an Innovative Finance ISA.
Boosting opportunities for businesses in this growing market is a key priority for UK Aid. Minister for Africa Harriett Baldwin said:
Africa’s solar industry is vibrant and exciting, full of potential to transform the lives of millions of people who are still living off the grid. By sharing British expertise we’re allowing this industry to flourish, helping the poorest to access clean, sustainable energy, while also opening up opportunities for UK business and investment.
This is a win for African countries and a win for the UK. The innovative solar sector is vibrant and booming in some areas of Africa, but the growth of companies is often restricted by market barriers such as a lack of access to finance and business support, high tariffs on essential components, lack of infrastructure for mobile payments, and lack of appropriate disposal facilities.
Enabling these companies to grow is not only benefiting some of the poorest households with life-changing access to energy, but creating jobs and boosting local economies to trigger long-term sustainable economic development. Strengthening the solar market in Africa is opening up opportunities for the UK’s own pioneering solar industry to access the untapped potential offered by African markets.
Proven examples of this include Sollatek, a Slough-based firm which, working in partnership in Africa and with investment via Energise Africa, has become one of the leading providers of specialist solar electronic equipment in East Africa.
The additional £1.6 million of capital to the Energise Africa platform will attract crowd investment from 1,500 new small UK investors, and connect at least 125,000 more people to clean, reliable energy – allowing the programme to reach a total of 325,000 people.
Energy 4 Impact, which manages the grant on behalf of UK Aid, supports this initiative by conducting research on the effectiveness of different types of interventions in crowd funding campaigns (e.g. match funding, lump sum payments, first loss) in order to drive co-funding opportunities.