If every UK and EU retail investor allocated just 1.7% extra per year the SDG funding gap could be closed. Energise Africa is providing a platform to make impact investing accessible to everyone.

Energise Africa is a UK crowdfunding platform enabling everyday people to invest from just £50 to support renewable energy projects (home solar) in Sub-Saharan Africa. To date, it has raised over £25 million in investments from everyday people putting their money to work for climate action and the Sustainable Development Goals.

Investments made via Energise Africa enable low-income families in climate vulnerable regions to climb the energy ladder without contributing to CO2 emissions. This finance supports solar energy companies, who contribute to the reduction of fossil fuel consumption by providing affordable solar power and efficient cook stoves to households who previously lit their homes with kerosene lamps and cooked their food on wood fires.

Key facts

• In just over 4 years, the platform has raised over £25 million in investments, repaid more than £12 million to investors, and supported 14 clean energy companies, operating across 15 countries.
• The platform has also enabled 600,000+ people gain access to clean, affordable electricity and mitigated 130,000 tonnes of annual CO2 emissions thanks to the 128,000 solar home systems they have financed.
• The platform is innovatively blending finance from Governments and Foundations (including funding from UK aid and Good Energies Foundation) alongside retail investors, using just £3m in match funds and guarantees to leverage over £21m in private capital from our crowd investors.
• Energise Africa is currently working to raise £100 million in annual investments via the platform by 2023 – that's enough to finance over 2 million solar home systems every year.

The challenge

People in the UK (and many other countries) are becoming increasingly aware of the impact of climate change, and several high-profile campaigns and NGOs have highlighted the fact that mainstream financial institutions are still continuing to finance the fossil fuel industry. As a result, there is an increasing interest in ethical and environmental investment products, but apart from Environmental, Social and Governance (ESG) screened pension and investment funds, there are very few products on the market, and those that are available can have high minimum investment requirements, be complex, charge high fees, or have other barriers to entry which put off “everyday people.”

The solution

Energise Africa address this gap in the market by providing a platform where people can make direct investments, starting from just £50. Energise Africa enables clean energy companies in emerging markets to raise affordable working capital finance from the “crowd” (the community of retail investors). An estimated 40% of SMEs in emerging markets cannot access finance through traditional financial institutions, so the alternative finance available through platforms like Energise Africa is vital in supporting their companies to grow and innovate.

Energise Africa enables pioneering energy access businesses to install solar systems in homes and small businesses and also provides productive use equipment to off-grid communities in sub-Saharan Africa through the provision of working capital finance via bonds issued on the Energise Africa platform. Since its launch in 2017, Energise Africa’s 4,000+ community of investors have provided more than £25 million to energy access businesses addressing SDG 7 – universal energy access. Energise Africa borrowers typically provide solar lighting products on ‘pay-as-you-go’ (PAYG) plans to low-income households, allowing families dependent on kerosene to transition to affordable clean energy.

Helping people

Since 2017, investments made via the Energise Africa platform have enabled over 600,000 people in Sub-Saharan Africa to gain access to clean, affordable energy, and supported over 7,000 micro and small enterprises to switch to solar-powered products. Low-income families in climate-vulnerable regions can climb the energy ladder without contributing to CO2 emissions, as the energy companies that issue bonds via Energise Africa sell solar systems to homes and small businesses on monthly finance, or "paygo" plans, with little upfront cost – putting this kind of renewable energy within the financial reach of many more people.

Companies raising finance via the Energise Africa platform provide their solar home systems on affordable monthly financing plans. Not only does this give low-income households access to energy, but it provides them with predictability in their monthly expenditures. Furthermore, once the system has been paid off (typically over a period of 6 - 24 months), the household will own the system outright, meaning their electricity is effectively free from thereon. This enables them to put their money to other needs, thereby increasing their resilience. It also means that these households are no longer so exposed to fluctuations in fuel prices or changes to government fuel subsidies (common in many Sub-Saharan African countries, with disproportionally negative impacts on low-income households).

Energise Africa’s investor analysis shows that people are primarily motivated by being able to see the positive social and environmental impact of their investments. Because the platform offers direct investment opportunities, UK retail investors know exactly which companies their money is going to, they can see which countries projects are being delivered in and can even read about the different solar home systems and appliances their investments will finance.

Spillover effect

Energise Africa is looking to further expand its financing of sustainable businesses working in other sectors such as sustainable transport, climate smart agriculture and water and sanitation etc. Investor analysis show there is appetite to go beyond sub-Saharan Africa and into other emerging economies.  With a greater automation of its investment analysis, due diligence and onboarding, Energise Africa aims to provide vital finance to 350+ companies by 2025.

Alongside this, Energise Africa is building on its successful track record of innovatively blended finance from Governments and Foundations. We see this as key to catalysing north-south financial flows from retail investors who would not otherwise participate in SDG impact investing. We are developing innovative products and approaches to mitigate risks for retail investors, and to enable new USD and local currency lending which better meets the needs of the companies we aim to support.

By working in partnership with foundations and institutional investors, the platform aims to maintain public-private sector leverage ratios of 1:7 or higher. Compare this to a recent report from the Overseas Development Institute which highlighted that for every $1 of public or foundation funding, only $0.70 was leveraged from the private sector when it came to Africa - it’s clear that Energise Africa is pioneering new ways for institutional and corporate investors to support SDG financing.

Investors in offers available on the Energise Africa platform put their capital at risk and any returns are not guaranteed.

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