18 June, 2024 Member article

Boosting West African solar companies through investment readiness

How to leverage the power of decentralised renewable energy to catalyse social, economic and environmental impact for the most vulnerable populations? This is the question that ARE Member ADA, a Luxembourgish non-governmental organisation that strengthens the autonomy of vulnerable people by leveraging inclusive finance to improve their living conditions, is addressing through its latest program called EVER – Green Energy for Rural Development.

ADA understands that to fulfil this social mission, energy service companies must innovate, take risks, learn by doing, invest and reinvent their business models. That requires flexible financial resources, expertise and a lot of audacity to venture into these new markets with a target that is unlikely to be financially attractive.

Thus, ADA has been working since 2023 with seven West African solar companies, to enable them to validate Proof of Concepts and accelerate their investment readiness. These projects have been approved for their ability to create a strong environmental and social impact while strengthening their governance and business model.

As an early-stage partner, ADA offered financing in the form of technical assistance and grants. The results are already visible, as with Qotto in Benin and PFE-Mbidi in Senegal, which won awards at the ARE Investment Academy in May 2024.

Qotto’s mission is to make essential services accessible to underserved populations, thus contributing to their empowerment. With the support of ADA, the company has tested a solution of multiservice kiosks enabling customers in rural areas to access solar kit products, but also e-money and mobile services. After a few months, we observed the existence of more than 109 kiosks, providing additional revenues to an equal number of self-entrepreneurs, and essential basic services to customers in very remoted areas. Additionally, through a partnership with the MFI Cap Finance, Qotto was able to distribute 106 nano-credits to micro-entrepreneurs who own solar kits via the Pay-as-you-go channel.

PFE-Mbidi is a new local energy company based in the small village of Mbiddi. It operates a solar mini-grid that powers nubian vaulted premises housing micro-enterprises that provide essential products and services in this remote village. Access to electricity encourages the setting up and development of these small businesses, and conversely, economic activity enables the entrepreneurs to pay for the electricity they consume, thereby making the mini-grid economically viable. PFE Mbidi was supported by ADA both to accelerate the productive use of energy for the dozen of small businesses connected to the platform and thus to make its business model viable.

Less than a year after these pilot projects, ADA is pleased to confirm that its contributions are already catalytic. Over the seven companies, some are already eligible for traditional financing with local banks to scale up, or concessional financing with partners such as the Financing Innovation Tools. Building on these initial results, ADA is pursuing its commitment by strengthening its support for the productive use of energy generated by solar mini-grids, and by facilitating access to inclusive financial services.