Norway's largest pension fund and its state-owned investment fund took a $5 million equity stake in d.light, one of the largest of the new crop of off-grid solar providers targeting the more than one billion people, mostly in Africa and Asia, who lack access to reliable electricity.
The investment is the latest in a line of renewable energy investments announced by leading oil producers, led by Norway. Norfund, owned by Norway's ministry of foreign affairs with a mandate to develop sustainable enterprises in developing countries, invested $1.8 billion in 2015. It operates under a requirement that 50 percent of its annual capital be invested in renewable energy, though the fund also invests in gas-fired generating plants. Norfund's co-investor in d.light is KLP Norfund Investments, Norway’s largest pension fund manager.
Solar is gaining traction as prices drop and distribution channels expand. The Global Off-Grid Light Association reports that as of June 2016, nearly 100 million people have moved to an “improved energy source” and off kerosene and other fossil fuel sources, generating $433 billion in savings.
For d.light, the investment, along with $5.5 million in grants from Beyond the Grid and Shell Foundation, follows a $22.5 Series D equity raise in the fourth quarter of 2016, and debt financing of $7.5 million. The company is using the capital to expand its pay-as-you-go financing program for its solar lanterns, most of which can charge mobile phones as well. Customers pay small amounts each month via their mobile phones, until the own their small solar systems outright. The model is credited with opening new channels of commercial financing for poor customers (see “M-KOPA Solar Demonstrates Pay-As-You-Go Financing“).
Ned Tozun, CEO of d.light, is at the World Economic Forum in Davos advocating for more attention to reliable access to energy, banking and the Internet for the two billion people at the base of the economic pyramid. Spending on kerosene, candles and diesel generators is a drain on economic and social development. Off-grid solar he said, “can catalyze a chain of events” in the developing and “significantly increase GDP.”
Photo credit: d.light