Sparks Electrical News February 2019

ENERGY EFFICIENCY

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US$41 MILLION FUNDING FOR AFRICA’S LEADING OFFGRID SOLAR BUSINESS

I nspired Evolution, an Africa-focused investment advisory firm that specializes in the clean energy sector, led a US$41 million equity in- vestment by its Evolution II Fund and other consortium partners into d.light. Evolution II invested US$18 million alongside US$10.6 million from the Dutch Development Bank FMO, US$7.5 million from Swed- fund and US$5 million from Norfund. This latest funding, which enables expansion of d.light’s solar and Pay-Go consumer finance business in Africa, brings the total amount of equity and debt that d.light has raised in the past two years to over US$100 million. Wayne Keast, Managing Partner at Evolution II said,” We are excited to partner with d.light, the market leader in the portable solar product and off-grid solar home system market, to support the expansion of their Pay-Go solar business throughout Africa which will help address the needs of more than 600 million people that do not have access to electricity.” d.light co-founder and CEO Ned Tozun said, “We are thrilled to have Evolution II as our newest and largest funding partner in the d.light family”. “The Inspired Evolution team’s energy expertise, strong network W ith the long-awaited Carbon Tax Bill now expected to be im- plemented in June of 2019, businesses still have some time to develop new energy strategies that can help to reduce their carbon footprint. To add to the woes of a carbon intensive foot- print, the National Energy Regulator of South Africa (Nersa) has also approved a 4% increase in electricity tariffs from April 2019, along with a R32.7 billion approval for Eskom’s Regulatory Clearing Account ap- plications – which is expected to effectively hike the electricity tariff increases to 12-15% for the next three consecutive years. One of the avenues available to businesses to fight these increases, is to find ways of curbing their energy consumption. With this inmind, the ideal strategy to contain andmanage the energy spend of a business, should start by looking at the relationship between the company’s profits and its energy expenditure. This is according to Barry Drotsche, Head of Energy Partners engineering – a division of Energy Partners and part of the PSG Group. “There are a wide variety of energy saving and renewable energy generation technologies available. However, each operation is different and a business owner has to know whether a chosen solution will provide the best return on investment. It is therefore important to understand how much of one’s energy costs are absorbed by the business, how much can be passed on to the customer, and which parts of the operation is responsible for unrecovered energy spend.”

largest existing distribution network for these types of products. With a strong emphasis on product quality and customer service since its earliest days, d.light has built up a loyal customer base in emerging markets. d.light continues to sell profitably hundreds of thousands of units per month, while maintaining excellent quality at scale. Its pay-go financing system has among the lowest delinquency rates in the industry. The company is led by a strong team of deeply experienced, internationally recognised leaders and highly committed, talented local staff. About Inspired Evolution and Evolution II Fund Inspired Evolution, investment advisor to Evolution I and Evolution II Funds, is a specialised clean energy infrastructure and resource efficiency investment advisory platform with offices in Cape Town, London, Nairobi and Mauritius. Inspired Evolution has been involved in developing and financing more than 1 000 mW of renewable energy infrastructure generation projects across Sub-Saharan Africa. peak hours in the morning to pre-cool the building before opening could have a more pronounced effect on profit margins when compared to the benefits realised from a PV system,” Drotsche explains. On the other hand, he says that businesses that have to absorb more of their daily energy costs, could benefit more from investing in generation capacity (i.e. PV or hybrid energy solutions) that are more cost effective when compared to the grid. “A manufacturing operation or a business that has to keep its own pricing low for customers in order to remain competitive, will see a direct link between its total energy expenditure and its profit margin. Investing in a PV system to reduce the amount of electricity that it takes from the national grid during the daylight hours, may therefore be the logical first step in this instance.” Drotsche adds that in both of the above mentioned cases, effectively measuring electricity consumption and being able to quantify the effect of different energy saving interventions is paramount. He points out that involving a reputable partner, with an in-depth understanding of energy saving strategies from the start, will allow a business to build a solution around its individual needs. “Having a thorough understanding of what a company needs in order to grow its profit margin, already increases the ability to innovate around existing challenges and obtain the most profitable solution for the business,” Drotsche concludes. Enquiries: www.inspiredevolution.co.za

and investor base adds significant value to the work of d.light, allowing us to expand our product line, launch in new markets, and reach more customers.” With a commanding market share in emerging markets in both Africa and Asia, the company’s revenue and profitability continue to accelerate at an impressive growth rate. This investment combined with solid debt financing and receivables funding solutions will put the company on an even steeper growth trajectory. Wayne Keast added, “this new capital and receivable funding will provide innovative financing for solar power products to a vast number of previously unbanked people in emerging and growth markets”. Since its founding in 2007, d.light has provided solar energy to more than 88 million people in 62 countries. Their extensive product line ranges from extremely affordable portable solar lanterns to solar home systems that can power multiple lights, mobile phones, and small appliances, including a flat-screen television. d.light’s solar solutions have won multiple international awards for their innovation and design and are sold through more than 30 000 outlets around the world—the To demonstrate this, Drotsche points to the example of a shopping mall. “The property owner’s primary motivation should be to increase profits by reducing operational costs. When devising an energy strategy, it is important to remember that all of the tenants in the mall are billed individually for the electricity they use in their shops. If they use more electricity, or if tariffs increase, tenants are billed more for what they consume. It is therefore clear that any changes in energy cost in this regard are passed on directly to the tenants and have no effect on the profits of the property owner.” He continues to explain that the energy use in the communal areas are a different matter. “To a large extent, the costs of managing the communal areas in the mall are not passed to the tenants directly, meaning that if the energy assets in these areas are not managed efficiently, the associated expenditures are eating away at the profits of the property owner. “It would therefore make sense to invest in energy saving measures that are primarily focused on this aspect of the operation. Installing a solar photovoltaic (PV) system is a great first step to reducing the impact that the common area operations could have on the cost of overall operations, but interventions should not be limited to this. Recommissioning air conditioning systems (which is a major energy consumer) with active control measures, replacing inefficient lighting with LED lamps, and running the air conditioning system during the off-

ENERGY STRATEGIES SHOULD START WITH A PROFIT-CENTRIC APPROACH

Enquiries: www.energypartners.co.za

AFRICAN INNOVATORS SHINE DURING ZAYED SUSTAINABILITY PRIZE

A frican innovators excelled at this year’s Zayed Sustainability Prize annual awards ceremony on Janu- ary 14 2019, winning in three out of five categories including Energy, Food and Global High Schools. The 2019 Zayed Sustainability Prize, which is the UAE’s pioneering global award in sustainability, honoured leaders whose work and spirit of enterprise has resulted in working solutions across communities around the world. With over 2 000 submissions from 130 countries, the highest number of applications came from Africa, which is a testament to the growing role African innovators are playing in global innovation. Picking up the Prize in the Food category was Tanzania’s Sanku, for its flour fortification machines that equip and incentivise small-scale, local millers to fortify their flour with life-saving nutrients. The winner in the Energy category was

to enhance and develop their solution. To date,the prizes’ 66 winners have impacted the lives of over 318 million people.

received the award for its Solar Suitcase, a portable maternity device to assist with childbirth and related medical services in off-grid rural areas. Winners each received US$600 000

for its decentralised community water management standard, which outlines a set of solutions for source management, water use, water recycling and discharge. In the Health category, ‘We Care Solar’

BBOXX, which has developed a plug-and- play solar device offering users an on-grid experience in an off-grid setting – a truly transformative solution that is changing hundredsofthousandsoflives inAfrica.The

Enquiries: www.zayedsustainabilityprize.com.

company has so far installed over 150 000 solar systems across 35 countries many of which are in Africa and has connected over 675 000 people globally with clean, affordable energy solutions. Mansoor Hamayun, CEO and co-founder of BBOXX, said; “We are passionate about harnessing pioneering data and technology to power economic growth and transform the lives of underserved communities living off-grid. Winning this award is an important milestone along our journey.” Within the Global High Schools category, the African Leadership Academy in South Africa won for its proposed creation of a water treatment machine called ‘The Living Machine’; a device they designed to treat greywater for use in greenhouses. Their proposal also included the implementation of solar power to reduce electricity costs; savings that will be used to fund additional renewable energy projects, waste management and best agriculture practices. In the other categories, ECOSOFTT was awarded in the Water category

Energy Winner, Mansoor Hamayun, CEO and co-founder of BBOXX.

SPARKS ELECTRICAL NEWS

FEBRUARY 2019