US$5m to fund the growth of innovative off-grid solar PV business

On the 23^rd of December 2015, InfraCo Africa signed a Convertible Loan Agreement with Redavia Tanzania Asset Limited (‘Redavia’). Redavia rents containerised PV solar to off-grid businesses and rural communities in Tanzania, supplying them with much-needed, clean power. InfraCo Africa has committed to provide up to US$5m to Redavia to fund the growth phase of this innovative business.

Redavia provides standardised shipping containers each with an installed capacity of up to 100KWp of solar power, back-up batteries (if required), controls and a low voltage connection equipment. They can operate as a standalone solution with batteries or displace/hybridise existing diesel generators. Containers are offered on a rental basis, individually or as a modular array, and can be rapidly redeployed if needs change or lease terms aren’t met. With on-site installation taking just 6 days, these containers avoid both the high up-front capital costs and lengthy development and construction periods typically associated with static PV plants.

With a national electrification rate of 15.3%, falling to 3.6% in rural areas, many Tanzanian businesses and households are reliant upon hazardous kerosene or expensive diesel for power. Extending the national grid to all could be prohibitively expensive and will take time, it will also require a parallel investment in power generation to ensure sufficient supply. To address these challenges, the Government of Tanzania (GoT) established the Rural Energy Agency (REA): its mission is to promote and facilitate improved access to energy in rural Tanzania by actively supporting off-grid power solutions.

Providing universal access to affordable, sustainable, energy is a global challenge and one encapsulated in the seventh UN Sustainable Development Goal (SDG). Major initiatives have been launched to address this goal in Africa, including the UK Department for International Development’s (DfID) Energy Africa Programme which has recognised that small scale off-grid solar is a compelling way to provide the access to energy required to build modern economies.

By supporting Redavia, InfraCo Africa is pioneering a new model for developing power: funding the growth of local businesses to rapidly scale-up deployment of off-grid solutions and achieve commercial viability. This approach is designed to complement project financed IPPs that supply power through a national grid and have a national level impact on economic development. If Redavia proves successful, the technology and business model could be replicated across sub-Saharan Africa, bringing achievement of the SDGs one step closer.

“We’re very pleased to be working with InfraCo Africa, the support and capital they can provide will enable Redavia to scale-up its business and provide power to rural communities and SMEs across Tanzania”

Erwin Spolders, CEO, Redavia