Today, June 22, 2021, Africa-focused renewable energy finance platform, Nithio FI announced that it has secured $4.5 million in funding to offer sustainable and renewable off-grid energy solutions for homes and small businesses in Kenya, Nigeria, and Uganda.
This round was led by FSD Africa Investments (FSDAi), the investment tier of FSD Africa, a financial sector development and catalyst programme based in Nairobi and funded by the UK Aid.
This funding, which complements Nithio FI’s total raise of $23 million, will support access to renewable energy for households, smallholder farmers and micro-entrepreneurs who otherwise will not be able to meet the costs. It wants to do the same for energy providers in Africa.
Nithio FI plans to continue its innovative approach, integrating repayment data and geospatial population mapping into its AI model to produce a standardised credit risk assessment and forecast of cash flows.
It is also looking to achieve its five-year goal of providing financing to more than 224,000 energy access products, like productive use appliances and solar home systems(SHS), across Africa.
Nithio Holdings — the parent company — is an AI-enabled energy financing platform whose mission is to standardise credit risk assessment by investing directly and efficiently in off-grid solar companies. Currently, Nithio FI provides receivables-backed financing in Nigeria, Uganda, and Kenya, with plans to foray into other African countries in 2022.
Over the years, the problem of inadequate power supply in most African countries has stifled economic growth. And the need to look out for alternatives like petrol and diesel-powered generators is normal for most households and businesses.
Also, there have been recent projections that by 2030, an estimated 650 million people will not have access to adequate electricity supply, with 9 out of 10 of them living in sub-Saharan Africa.
Nithio FI aims to intensify the reach and access of electrification to more African homes and businesses, banking on its pay-as-you-go (PAYGO) financing model and catalytic capital solution.
Commenting on this investment, Nithio FI Co-founder and CEO, Hela Cheikhrouhou believes that “in order to achieve universal energy access by 2030, last-mile financing must scale to the billions. Nithio has developed an innovative approach powered by its Risk Analytics Engine to lend to small, medium, and large off-grid energy operators to drive scalable connectivity.”
In 2019, African Development Bank(AfDB) approved a $25 million cheque for renewable energy projects in sub-Saharan Africa. Subsequently, the Central Bank of Nigeria (CBN) approved credit facilities of up to approximately $1.3 million for players in the renewable energy sector in 2020, creating easy access to renewable energy might be Africa’s fast-speed solution to defeating the problem of epileptic power supply.