Easy Solar raises USD 5 million to continue its expansion of solar systems, appliances, and consumer electronics across Sierra Leone.
Wednesday 13 April 2022 — Easy Solar, a leading last mile distribution and asset financing company that sells solar systems, productive appliances & consumer electronics, has secured a USD 5 million senior secured debt facility to expand its reach across Sierra Leone. The funding was advanced in local currency by the Facility of Energy Inclusion’s Off-Grid Energy Access Fund (“FEI-OGEF”, managed by Lion’s Head Global Partners Asset Management (“Lion’s Head”) and with support from The Currency Exchange Fund (”TCX”), that provided the hedging instrument.
Easy Solar began operations in 2016, focusing on solar-powered lanterns and home systems for low income, rural customers without access to electricity. The facility will enable Easy Solar to continue to finance its core range of solar products and deepen penetration across rural communities in Sierra Leone.
In 2020, the company expanded its “Buy Now, Pay Later” model to finance a wider range of energy efficient appliances and consumer electronics, which includes smartphones, cookstoves and appliances such as TVs, fans and freezers. Through its extended distribution network and innovative partnerships (local banks, government-backed payroll deduction for civil servants, and mini-grid companies), Easy Solar addresses the needs of both off-grid and on-grid customers looking for reliable, life-improving products. Since 2021, Easy Solar has also been catering to the needs of larger residential, commercial and industrial customers through its “Power Solutions” business unit and is on track to have installed over 1.5MW of power by the end of 2022.
According to Alexandre Tourre, co-founder and CEO of Easy Solar, “Despite the challenges of a global pandemic, Easy Solar grew by more than 300% between 2019 and 2021, demonstrating the scale of the demand for energy access, reliable backup power and affordable consumer electronics in West Africa. Access to affordable local currency debt financing has been one of the main constraints to accelerating our expansion in our core markets and beyond. The partnership with FEI-OGEF will allow us to strengthen and simplify our balance sheet while bringing access to energy to hundreds of thousands of people in Sierra Leone.”
FEI-OGEF was set up by the African Development Bank (“AfDB”) as part of its New Deal for Africa initiative. In addition to the investment by the AfDB, FEI-OGEF received equity funding from KfW, the Nordic Development Fund (“NDF”) and All On. The AfDB also invested on behalf of the Global Environment Facility and the European Commission.
Commenting on the investment, Alix Graham, Fund Manager for FEI-OGEF at Lion’s Head said, “I am excited to see and support the continued growth of the Off-Grid sector in Sierra Leone. With access to energy in Sierra Leone sitting at around 23% of the population, it is imperative that companies like Easy Solar can scale. We were impressed by Easy Solar’s strong management team that has successfully steered and grown the company over the past five years, and we look forward to seeing continued growth. To help support their business, we were able to structure a facility that provides access to local currency funding, which will, in turn, help them manage their foreign currency risk and ultimately provide affordable products, at scale, to reach more off-grid households in Sierra Leone.“
Power Africa provided legal support and technical advice to Easy Solar for the debt transaction with FEI-OGEF, assisting with negotiations and the review of guarantee documents through a team from Norton Rose Fulbright.
Ruurd Brouwer, CEO of TCX: “We are delighted to have supported this debt transaction in local currency for Easy Solar in Sierra Leone together with our long-standing partner Lion’s Head. TCX is committed to support the off-grid energy sector by de-risking local currency transactions for our clients and their investees. Through this facility, Easy Solar can expand its business in Sierra Leone and provide more households with access to energy without having to bear foreign currency risk.”
About Easy Solar
Founded in 2016, Easy Solar is a last-mile distribution company and asset financier making high quality energy products affordable & accessible. As of March 2022, the company powers the lives of 750,000 people in Sierra Leone and Liberia. Easy Solar has invested in the deployment of more than 470 points of sales in communities, and is capable of handling physical inventory and to receive cash transactions. To ensure its products are affordable to most, Easy Solar allows customers to pay overtime through a “Buy Now, Pay Later” financing structure enabled by pay-as-you-go technology. For most of its customers who remain unbanked, this is their very first step toward financial inclusion.
Easy Solar has over 300 full time staff across Sierra Leone and Liberia, with 50% of women in senior management. In 2019, Easy Solar was awarded Social Entrepreneurs of the Year by the Schwab Foundation and World Economic Forum for its commitment to advancing SDG7 in last mile communities, ensuring no-one is left behind in the clean energy transition. You can find further information about Easy Solar on its website at — https://www.easysolar.org
About Lion’s Head
Lion’s Head is a specialized investment bank based in London, Lagos, Nairobi, New York, Dubai and Amsterdam, which provides financial advisory and investment management services across a range of sectors, including agriculture, energy, financial services, and infrastructure with a focus on innovative ways to increase capital markets engagement for businesses and governments in sub-Saharan Africa. As a fund manager, Lion’s Head AUM is approximately $600m . In addition to the Off-Grid Energy Access Fund, Lion’s Head is the fund manager for the parallel FEI On Grid facility, offering debt on a project finance basis to developers, IPPs and other renewable energy platforms in Africa, the Africa Go Green Fund (AGG) that provides debt funding to energy efficiency and renewable energy businesses in Africa, and the African Local Currency Bond Fund (ALCBF), created by KfW and supported by FSDA and various DFI and private investors to anchor public debt issuances.
TCX is a global development finance initiative structured as a fund that counts among its shareholders FMO, IFC, EBRD, EIB, KfW and AFD together with the Dutch, Swiss, British and German governments and the European Union as first loss providers. TCX offers medium- to long-term cross-currency swaps and FX forwards to hedge 100+ currencies where such products are not available or poorly accessible. TCX started its operations in 2007 and has since then provided hedging instruments with a total volume of USD 8 billion, spread over 3,000 transactions in over 60 currencies. Today, the fund has a total exposure of over USD 5 billion on 55 frontier market currencies. For more information, visit www.tcxfund.com