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Malawian solar energy startup, Yellow, secures $4 million in debt financing

Malawian solar energy startup, Yellow, secures $4 million in debt financing - Startup Lagos

Introduction

With vast parts of Africa suffering from a persisting energy gap, many startups are looking at ways of offering viable alternative provisions of energy for the continent. Also, in keeping with the Sustainable Development Goals on Affordable and Clean Energy, there is a lot of focus as well on reducing carbon emissions to “net zero” by 2050.

As of 2019, over 14 African countries ranked high on the list of countries with the largest number of people without access to electricity globally. Nigeria topped the list, with an access deficit of over 90 million people. Other African countries on the list were Congo, Ethiopia, Tanzania, Uganda, Mozambique, Sudan, Niger, Burkina Faso, Malawi, Angola, Kenya, and South Sudan.

Malawi records just about a 5% access rate to electricity in the rural areas and ranks as one of the lowest in Africa.

Lighting up Malawi

With the goal of solving the energy poverty challenge in Malawi, Mike Heyink, the Founder and CEO of Yellow, helps by distributing solar home systems that remarkably improve access to electricity in rural areas of Malawi. Through an affordable pay-per-use system, the startup takes into consideration, the low purchasing power of rural residents. This helps to make easy the objective of mitigating the challenges with access to electricity in the region.

Mike Heyink, Founder and CEO of Yellow

Presently, the startup claims to have distributed over 110,000 solar kits that make accessible, electricity, to over 400,000 people. This has helped to reduce CO2 emissions per year by 12,000 tons, as kerosene stoves are replaced by affordable and clean solar energy in rural homes. Its ultimate objective is to provide solar home systems to over 100,000 rural households in Uganda and Malawi.

$4 million debt facility for expansion

Announcing on Monday, the startup had declared a new $4 million debt facility from SunFunder. Earlier on, last year, the startup had raised about $3.3 million from Platform Investment Partners (PIP) and Ruby Rock Investment, to increase and double its impact across Malawi. As Collins Kuindwa, Investment Officer at SunFunder goes on to describe,

Yellow has quickly established itself as a leading off-grid solar operator. We are particularly pleased to be starting this new partnership having stayed in contact since their early days – supporting new players, as a trusted advisor and partner rather than just financier, is built into SunFunder’s own journey helping to establish the off-grid solar sector.

With these new funds, the dynamic Malawian startup is intent on expanding its reach to various other parts of Africa, while consolidating on its footprints in Malawi and Uganda. As Mike Heyink is quoted as saying,

The mission to electrify millions of households in Africa through the efficient distribution of PAYGO solar home systems is an incredible commercial, social and environmental opportunity. We are thrilled to have a leader in the field like SunFunder endorse Yellow’s business model, and provide the finance to enable our continued expansion.

To a brighter future

While funding in African startups is increasing this year, already hitting about $2.5 billion in value, it is important that areas, where Africa is facing significant challenges, are met with the right impetus in financial investments to proffer lasting solutions. As many African countries investing more in clean energy projects, and the inflow of investments in the energy sector, Yellow is keen on making a more lasting impact in Africa. Along with this interest in clean energy for Africa, there is a wider proliferation of groundbreaking research on alternative and renewable sources of energy for Africa.

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