NEW YORK — Off-Grid Electric Ltd., a provider of distributed-generation solar systems, raised $7 million in loans to install rooftop systems in Tanzania.
International Finance Corp., the World Bank’s private-sector financing arm, is providing $4.5 million and Cordiant Capital $2.5 million, according to an e-mailed statement. Off- Grid Electric has raised about $35 million, including grants, and is seeking to increase the number of sunshine-powered households in Tanzania this year to 200,000 from about 35,000.
Most customers have small rooftop systems connected to a few LED lights and a wall-mounted battery that can charge phones and electronics, said Xavier Helgesen, Off-Grid’s chief executive officer. Homeowners typically sign 10-year lease-to- own agreements and pay for power daily or weekly using codes delivered via text to their mobile phones. That steady revenue attracted the attention of the IFC, Helgesen said.
“They have enough data to make a bet on the company and be the first significant lender against these payment streams,” Helgesen said Friday in a telephone interview. “It’s a similar philosophy to SolarCity and one of the reasons we have them as an investor. We’re very in line with their approach.”
The annual market for solar-powered lighting soon could reach $2.7 billion, the head of the Global Off-Grid Lighting Association said December in London. Sunlight-powered lanterns and batteries provide energy that otherwise would have to be generated with kerosene.
People in Tanzania living on a few dollars a day greatly appreciate the opportunity to generate clean power, said Nikunj Jinsi, IFC’s global head of venture capital.
“The challenge is the financing of it, and that’s exactly what this facility is meant to do,” Jinsi said.
Copyright 2015 Bloomberg
Lead image: Rooftop solar via Shutterstock