Off-grid RDG Collective and seed impact investor EDFI ElectriFI to narrow electrification gap in Zambia
EDFI ElectriFI, the EU-funded Electrification Financing Initiative, invested a USD 2 million convertible note in RDG Collective, an early-stage Solar Home Systems and Productive Use Appliances provider in rural Zambia.
Brussels, 6 October 2022 – The EU, through ARE Member EDFI ElectriFI's impact investing facility, supports off-grid electrification solutions in Zambia by investing in RDG Collective, with USD 2 million.
Founded in April 2018, RDG Collective was established with the ambition to ‘Empower the Future’, by developing and distributing innovative Solar Home Systems (SHS) throughout Zambia where an estimated 2.4 million households still lack access to electricity. While the cost of solar energy solutions remaining prohibitively high for almost all off-grid households, RDG Collective came up with innovative products distributed on a PAY-AS-YOU-GO (PAYG) basis. By eliminating this financial barrier, an increasing number of households across Zambia can now access solar home systems, refrigerators, solar water pumps, and smartphones to improve and empower their lives.
With EDFI ElectriFI financing, RDG Collective expects to distribute more than 50 000 new SHS over the next 6 years, resulting in 174k tCO2 emissions avoidance.
“Adding RDG Collective to our portfolio with a USD 2m convertible note, matches our desire to allocate dedicated funding to Zambia, a geographical priority for the facility. While the company is still at a relatively early stage of development, it has already built a strong business model relying on local workforce only and is ready to scale up. We are confident that this financing will not only perfectly complement the grant that RDG secured from Beyond the Grid Fund for Africa but also support RDG Collective’s continued expansion in Zambia. We are very proud to support RDG Collective’s commitment to bring renewable and reliable electricity to more than 250.000 people!” explained Quentin De Hoe, ElectriFI Senior Investment Officer at EDFI Management Company.
“Firstly, I would like to thank the Government of Zambia and the European Union for releasing a platform such as EDFI ElectriFI. Initiatives like that clearly unblock the access to finance for the private sector to invest in the energy sector in Zambia. Secondly, I thank EDFI ElectriFI for its endorsement of RDG’s success to date and potential for more. The investment will enable us to further expand our sales network across Zambia and significantly, support the distribution of productive-use appliances, such as solar water pumps and refrigerators. These appliances will empower thousands of households with the ability to generate sustainable income, to mitigate climate change, and to improve their livelihoods,” added Rune Gunnar Dige, Founder and CEO at RDG Collective.
The EDFI ElectriFI investment falls under its dedicated window for Zambia, a strategy funded by the 11th European Development Fund for Zambia and designed specifically for the country, in close collaboration with Government, local authorities and the EU Delegation to Zambia and COMESA.