The Off-Grid Energy Access Fund (OGEF) managed by Cygnum Capital Asset Management has invested $10 million in M-KOPA.
Through its flexible digital credit model, M-KOPA provides underbanked customers access to productive assets. Customers pay an initial deposit, followed by daily or weekly micropayments enabled by Internet-of-Things (“IoT”) technology. As a leading distributor of Solar Home Systems (“SHS”) in East Africa, M-KOPA has leveraged its technology to expand its offering to other products and services, including smartphones, electric motorbikes, cash loans and health insurance. To date, M-KOPA reached over 3 million customers, of which over 1 million are SHS customers.
OGEF’s investment will enable M-KOPA to build-up on its existing track record in Kenya and Uganda to reach significantly more low-income households with energy and digital access, as well as ensure continued after-sales services to existing customers.
Jesse Moore, CEO and Co-founder of M-KOPA said:
"At M-KOPA, we are working hard to create a positive environmental and social impact by systematically addressing the barriers to digital financial services. We have already unlocked $1bn in cumulative credit to over 3 million customers, and are proud of the thousands of local jobs we’ve created during tough economic times. As we continue to scale, impact and inclusion will remain core to our success. We are delighted to have the support of OGEF as an investor who supports our vision and mission. We look forward to the future of M-KOPA as we strive to serve 10x our customers over the next five years”.
Alix Graham, Managing Director at Cygnum Capital stated:
“We are excited about the partnership with M-KOPA and the opportunity to provide an innovative sustainability-linked loan that will bring affordable solar energy and digital access to low-income households. We believe M-KOPA has huge potential, both in terms of its business model and the impact it will have on the lives of millions of people. We are thrilled to support the company's growth and to be part of a movement towards a more sustainable, equitable future."
Founded in 2011, M-KOPA is a fintech platform that provides digital financial services to underbanked consumers by leveraging data to combine digital micropayments with IoT technology. With operations in Kenya, Uganda, Nigeria and Ghana, M-KOPA’s platform has provided over $1 billion in financing and enabled 3 million customers to access smartphones, solar power systems, digital loans and health insurance. The company directly employs nearly 2,000 people across Africa and has created over 10,000 roles for sales agents since the start of 2020.
About the Off-Grid Energy Access Fund
OGEF is designed to support low-income rural households and SMEs in Sub-Saharan Africa by offering flexible financing solutions to companies providing affordable renewable energy off the grid. The Fund invests via a range of debt instruments, including receivables lending, inventory finance, other working capital lending and corporate debt with a focus on increasing the availability of local currency debt and enhancing the capacity of local capital markets.
OGEF was set up by the African Development Bank as part of its New Deal for Africa initiative. The AfDB also invested on behalf of the Global Environmental Facility and the European Commission. In addition, OGEF received equity funding from the German Federal Ministry for Economic Cooperation and Development through KfW, the Nordic Development Fund and All On, and loan commitments from the Austrian Development Bank, Calvert Impact Capital and Prudential.
About Cygnum Capital (formerly Lion’s Head Group)
Cygnum Capital is an investment bank and asset manager, operating across frontier and emerging markets. Cygnum Capital Asset Management manages five pioneering funds: 4 debt funds including (i) the African Local Currency Bond Fund (“ALCBF”), a ground-breaking investment vehicle established to support local currency capital markets, (ii) the Off-Grid Energy Access Fund (“OGEF”) which supports companies in off grid energy such as SHS and small - medium Mini-Grids, (iii) the Facility for Energy Inclusion (“FEI”) which supports companies that provide a range of renewable energy solutions such as medium - large Mini-Grids, C&I and IPP with a maximum capacity of 25 MW, and (iv) the AfricaGoGreen (“AGG”) Fund which supports companies combating climate change by reducing the use of fossil fuels through new technologies and that increase energy efficiency; and a VC Private equity fund (v) E3 LCEF which investsin climate-smartservices, digital connectivity & Applications, lowcarbon productivity enablers. Cygnum Capital Asset Management has over US$750 million of assets under management with investments in 27 African countries.