Two innovative approaches to funding African solar

With Cape Town-based The Sun Exchange’s cell-level solar leasing model now reportedly serving 19,000 micro investors, the World Bank’s program of linking finance directly to carbon emission tonnage is another route to bringing PV investment to fruition across the continent.

February 2, 2021

Carbon credit finance and the ‘people-powered solar’ peer-to-peer photovoltaic cell leasing models were the subject of a recent webinar on innovative ways of generating PV project investment in Africa.

As part of the event staged by trade body the Africa Solar Industry Association (AFSIA), Bernardo Lazo, of London-based, East and West Africa-focused PV distributor Namene Solar, discussed how carbon credit financing had helped fill the funding gaps on a project to distribute 652,000 ‘pico-solar’ lights for 1.2 million people in Namibia.

The financing model offered by the company – formerly known as Yingli Namene West Africa – involves multilateral development lender the World Bank paying for each metric ton of greenhouse gas emissions prevented by renewables projects. Although carbon crediting will not provide all the funding needed for project development it can help bridge gaps to bring such schemes to life, as it did in Namibia.

Lazo stressed, though, the cost of independently certifying the amount of carbon saved meant such projects had a minimum scale of driving at least 10-20,000 tons of annual carbon savings, with the Namibia scheme demonstrating the efficacy of aggregating numerous small scale renewables consumers into single investment opportunities.

The successful roll-out of such projects requires selection of the correct solar product and project partners, Lazo told the AFSIA webinar, as well as efficient data collection – to verify carbon savings – and a fully-functioning distribution model and monitoring of the units distributed, for after-sales service.

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Saul Wainwright, chief financial officer at Cape Town based solar cell leasing business The Sun Exchange, discussed his company’s use of people-powered solar to get installations up and running.

The South African company – founded in 2014 and which now claims 19,000 members in 168 countries – offers small scale, crowdfunding-style solar investors the chance to fund individual solar cells in its planned arrays, in return for banking 20 years of lease payments on each generation device once projects come to fruition.

Wainwright told the AFSIA webinar his company only considers projects which can generate electricity cheaper than existing options and aims to supply power at 20-60% lower than what’s available on the market.

With The Sun Exchange providing insurance for its renewables projects, and replacing inverters and panels, Wainwright said the company also accepted cell investments through Bitcoin, enabling the micro payments at minimal transaction cost. The company’s website claims it offers many of its clients their first experience of Bitcoin and blockchain systems.

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