Cheaper Wholesale Solar Equipment Through $10M Group Purchase Fund in Nigeria – pv magazine International
Two investors, backed by charitable foundations set up by energy giants, have funded the cash pot with seed capital to lend to African solar companies, which can buy solar kits more cheaply thanks to the economies of scale offered by bundling orders.
November 25, 2021
Amid repeated calls for innovative approaches to unlocking the potential of African solar energy, two impact investors have each pledged US$5 million to support an aggregate purchase program in Nigeria aimed at reducing wholesale costs of PV equipment, logistics and financing .
Lagos-based company All On – which is funded by the Shell Foundation founded by Anglo-Dutch energy giant – and the Global Energy Alliance for People and Planet (GEAPP), led by the Rockefeller Foundation, founded by Shell’s US colleagues, have provided $10 million cash pot for the Demand Aggregation for Renewable Technology (DART) program.
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The DART fund is loaned to eligible solar equipment suppliers so they can purchase products at a lower price thanks to the centralized bundling of orders by Colorado-based renewable energy data and technology company Odyssey Energy Solutions.
The program will initially provide loans to solar companies approved by Nigeria’s state-owned Rural Electrification Agency to supply their Nigeria electrification project, and then roll out to four other unspecified African “pilot” countries.
It is hoped that lower solar system prices, driven by demand aggregation, will attract more investors to Africa’s solar business, not least commercial banks, which could be persuaded to offer cheaper financing.
“This is an example of the kind of innovation and collaboration needed to close the energy access gap, enable a just and inclusive energy transition, and unlock a sustainable future for all,” said Damilola Ogunbiyi, CEO and Special Representative of the UN Secretary. General for Sustainable Energy for All, quoted in a press release issued yesterday on behalf of DART project partners All On, GEAPP and Odyssey.
Ahmad Salihijo, MD of Rural Electrification Agency, said: “This could be a breakthrough in bridging the funding gap hampering the growth of small and medium sized businesses in Nigeria’s burgeoning renewable energy sector.”
The recently formed $10 billion Global Energy Alliance for People and Planet has members including the Bezos Earth Fund, founded by Amazon owner and world’s richest man, Jeff Bezos, and the Ikea Foundation, which co associated with the Swedish furniture giant. Publicly funded partners include the World Bank, USAID, the Asian Development Bank, the European Investment Bank and the International Renewable Energy Agency.
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