UK investors could play a critical role in getting affordable solar energy to families in sub-Saharan Africa

Katie Hill - Editor-in-Chief, My Green Pod

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Published: 6 October 2017

This Article was Written by: Katie Hill - My Green Pod

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With support from UK aid and Virgin Unite, online impact investing platforms Lendahand and Ethex have launched Energise Africa, an initiative that will put life-changing solar home systems within the financial reach of rural families in sub-Saharan Africa.

Eligible UK investors can invest in the pioneering businesses that install these solar systems; their money will help to bring clean energy and economic opportunities to families whilst generating an annual return of up to 6%.

Investors will also be able to benefit from tax-free returns by holding their Energise Africa solar investments within an Innovative Finance ISA.

Impact on families

Currently 600 million people in sub-Saharan Africa don’t have access to electricity, limiting their chances of achieving economic prosperity and improving their quality of life.

Energise Africa’s pioneering solar businesses are bringing affordable, clean energy and potential economic opportunities to thousands of families.

Over a period of one to two years, families can make regular monthly payments, after which they will own the solar home systems outright and be able to make further savings.

‘Solar energy access can be hugely important both from a social development and environmental perspective. Whether it’s promoting gender equality, financial inclusion or improving health and education – the impact for families can be significant.’

LISA ASHFORD
Director, Lendahand Ethex Ltd

Can we wait until 2080?

Supported by UK aid from the Department for International Development and Virgin Unite, the nonprofit foundation of the Virgin Group, the main objective of Energise Africa is to accelerate progress towards the achievement of the UN’s Sustainable Development Goal 7 – universal access to affordable, reliable, sustainable and modern energy for all by 2030.

At the current rate of development this won’t be achieved until 2080 in
Sub-Saharan Africa.

‘Energise Africa addresses one of the key challenges in the off-grid energy space – access to debt. This project will have significant impact in delivering improved energy access, and therefore improved livelihoods, to many families in sub-Saharan Africa.’

ROSANNE GRAY
Managing director of Virgin Unite

How to invest

Anyone interested in investing and getting a clear social, environmental and financial return can follow Energise Africa’s four-stage process:

  • 1) Choose a solar project to lend money to
    Investors will be lending money to solar businesses working with Energise Africa. Some projects will also benefit from match funding and these are clearly indicated.
  • 2) Lend money to a business
    People can invest as little as £50 in solar businesses, alongside other investors. Once the project is fully funded the money is transferred to the solar business and the interest on the investment starts building. The businesses are able to purchase the solar home systems and start to distribute them to families in rural areas. Investors can monitor the status and impact of their investment by regularly accessing their wallet.
  • 3) New opportunities are created for African families
    The loans provided to the solar businesses are then used to purchase solar home systems which are then provided to African families with an affordable ‘pay-as-you-go’ financing plan. Typically, families make monthly payments over a period of 12-24 months (depending on the size of the solar system) and then the family owns it outright once all payments have been made.
  • 4) Investors get their money back
    Every six months investors will receive both interest and a capital repayment
    from their chosen business. These funds can either be repaid or can be
    reinvested in a new project.

‘We’re extremely pleased to have formally launched Energise Africa, and we’re delighted to see that during the 8-week pilot phase we have already raised more than £450,000 of investment from more than 150 investors which could help more than 7,000 people gain access to clean electricity.

‘We’ve developed Energise Africa in a way that is much more accessible for people, as eligible investors can invest as little as £50 in making their money do good. With 19.5 million people in the UK already involved or wanting to get involved in making sure their savings and investments have impact, Energise Africa provides a straightforward way to do this – especially as
investments that fall within the £20,000 allowance per tax year can potentially earn tax-free returns within an Innovative Finance ISA.’

DANNY DEN HARTOG
Managing Director, Lendahand Ethex Ltd

Lendahand Ethex Ltd is an appointed representative of Share In Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 603332).

Click here for more about the the projects available for investment, plus legal information and projected returns.

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