Amplifying Solar Energy in Malawi: Yellow Malawi's endeavor to expand solar energy availability
Yellow Malawi, a pioneering off-grid solar distribution company based in Malawi, has secured a significant investment of $2 million from Acumen's Hardest-to-Reach (H2R) initiative. This investment is set to revolutionise energy access in Malawi, one of Africa's least electrified nations.
Established in 2018, Yellow Malawi has already made a substantial impact, providing energy access to over 530,000 customers and smartphones to 62,000 individuals. Co-Founder of Yellow Malawi, Maya Khonje-Stewart, emphasised the importance of this partnership with Acumen, stating that it's more than just financial support; it's a catalyst for social change and sustainable development.
The H2R initiative, part of a $250 million program aimed at stimulating clean energy markets across 16 underserved regions in Africa, uses various financial instruments to invest in off-grid solar companies. The investment in RDG Collective, an off-grid solar distributor in Zambia, was also facilitated by a TCX EU Market Creation Facility subsidy to reduce hedging costs.
The investment in RDG Collective will enable energy access for 66,000 people and support 180 small businesses with reliable, clean energy sources. In addition, this investment is expected to provide energy access to 182,000 individuals, with 145,000 expected to receive electricity for the first time.
The investment structure is designed to mitigate financial risks and support sustainable growth. The first $1 million will be disbursed in US dollars, with repayments in Malawian Kwacha. The second tranche will be handled entirely in US dollars to address foreign exchange risks.
The financial institution that supported RDG Collective in Zambia with a $1.25 million investment alongside Yellow Malawi is Inside Capital Partners. This investment is intended to foster local economic development in Zambia.
By combining innovative financing with a deep understanding of local needs, Yellow Malawi is not just providing electricity but also empowering communities and driving economic growth. Increased access to reliable energy can transform education, healthcare, and economic opportunities in rural areas of Malawi.
Yellow Malawi's success story serves as a beacon of hope for sustainable energy solutions in Africa. The company's focus on off-grid and rural customers has positioned them as a key player in Malawi's energy landscape. This latest investment represents a significant step towards bridging the urban-rural divide in energy access in Malawi.
In June 2023, Yellow Malawi secured $14 million in Series B funding for launching digital and financial products and expanding their presence in existing markets. The H2R initiative's investment in Yellow Malawi is a testament to their potential to transform energy access in Malawi and beyond.
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