Pay-as-you go (PAYG) solar provider PEG Africa has announced a US$1.5 million debt raise to fund the purchase of solar home systems that will reach 75,000 people in Ghana.
PEG has established itself as the largest PAYG financing company in Ghana, providing loans for solar home systems and other useful assets to off-grid households.
The company focuses on off-grid customers, often rural and considered risks by banks and microfinance firms, offering PAYG technology that allows it to control assets remotely in the field while they are being repaid by customers.
Having raised a US$7.5 million Series A funding round in June to expand operations, build out its management team and launch in Ivory Coast, PEG has now raised a further debt round of US$1.5 million to help it reach its goal of providing financing to 500,000 households in West Africa by 2020.
“This debt deal is a landmark in West Africa for the off-grid pay-as-you-go solar sector, and will allow us to focus on continuing to grow our business. We are also proud to have received the support of our legal advisers, Nixon Peabody, on this innovative transaction,” said Hugh Whalan, chief executive officer (CEO) of PEG Africa.
Stefan Issler of ResponsAbility, which led the round that also included Oikocredit and SunFunder, and is providing PEG with technical assistance to develop a larger debt facility, said the firm was delighted to be a part of PEG’s success story and bring electricity to thousands of households in Ghana through a financially viable business model.
“This transaction is a great example of how different lenders can successfully cooperate to provide funding to unlock growth in the energy access sector,” he said.
David ten Kroode, Oikocredit’s renewable energy manager, said his firm’s involvement in the deal built on its experience of providing innovative local currency financing for the development of promising renewable energy businesses.
“We’re proud to be partnering with PEG and expanding our support of off-grid solar into West Africa,” he said.