FinDev Canada, Canada’s development finance institution, has annoucned its first transaction, a $10m investment in M-KOPA, a ‘pay-as-you-go’ energy provider to off-grid homes in Kenya.
M-KOPA has connected 600,000 homes across Africa, providing 75 million hours of kerosene-free lighting each month. Its battery-powered systems come with lights, phone-charging, and a solar powered radio; with daily mobile money payments being less than the cost of traditional fuels.
After completing their payment plan the customer owns the system outright, or is able to get more cost-effective financing for a range of productive assets.
M-KOPA has sold over 250,000 of these upgrade assets including more lights, televisions, energy-efficient cooking stoves, water tanks and internet-enabled smartphones.
“M-KOPA is exactly the type of entrepreneurial company that FinDev Canada wants to support,” said Paul Lamontagne, Managing Director of FinDev Canada.
“Our investment will allow M-KOPA to reach more households across East Africa, providing access to clean power, creating significant levels of employment, and helping customers save money and build a credit history. Services like these have a favourable impact on women,” he said.
Most of the three million people living in M-KOPA connected homes are classified as low-income with per capita income of less than US$2 per day. Access to power is a major issue in Africa. According to the International Energy Agency, more than two-thirds of the population in Sub-Saharan Africa live off the electricity grid.
“M-KOPA is about upgrading our customers’ lives with high-quality and affordable energy solutions,” said Jesse Moore, CEO of M-KOPA.
“This investment will help us to bring power to another one million households over the next five years.”
Women stand to gain the most from this off-grid solution as they carry the majority of household responsibilities, availability of electricity will have a transformative impact on family life.
M-KOPA also offers good-quality jobs for women, with 52% of 800-plus East African work force of permanent employees and 44% of their commissioned sales agents being female.
This investment exemplifies FinDev Canada’s commitment to enabling transactions with substantial developmental impact around economic growth and job creation, improving the lives of women, and reducing poverty and environmental impact.
FinDev Canada is joined in this deal by existing investors including CDC Group, the UK’s development finance institution.
The March 2017 federal budget confirmed the Government of Canada’s intention to create a development finance institution (DFI), to be housed within EDC and capitalized with $300m.
The DFI has been built progressively since the 2017 announcement.
The Development Finance Institute Canada (DFIC), operating under the FinDev Canada brand, is a wholly owned subsidiary of Export Development Canada (EDC), headquartered in Montreal.