- Ignite Power Secures $15M to Drive Solar Energy Growth in West Africa
Ignite Power’s subsidiary, Westa Solar, has secured $15 million in funding from Afrigreen Debt Impact Fund to expand its commercial and industrial solar energy services in West Africa. The investment will be disbursed in two tranches: an initial $4 million and a further $11 million upon successful deployment of the first phase. This funding will drive Ignite Power’s mission to accelerate solar energy adoption in the region, starting with Nigeria.
Ignite Power’s innovative financing model will sufficiently make solar energy accessible to businesses without requiring large upfront investments. Through Power Purchase Agreements (PPAs) and leasing options, customers can enjoy clean, reliable, and affordable energy solutions. This approach seeks to address the region’s significant energy challenges, including unreliable grid electricity, high diesel costs and the removal of traditional financial barriers. The Ignite Power’s tailored financing options will unlock growth opportunities in the commercial and industrial (C&I) sector.
Africa’s commercial and industrial sectors hold vast potential for solar energy, with Nigeria, the continent’s largest economy, at the forefront. The country’s industrial sector faces significant challenges, including frequent power outages, unreliable energy supply, and high diesel generator costs. Solar energy offers a solution, providing cost savings, operational reliability, and environmental benefits. Renewable energy also provides uninterrupted power supply, reducing downtime and inefficiencies. It is also a clean, and sustainable energy source, with a lower cost per kilowatt-hour compared to diesel generators, making it a highly competitive alternative for businesses.
In Nigeria, where affordable financing is scarce, a ground-breaking hedging structure has been developed for this transaction. In partnership with the International Finance Corporation (IFC), the agreement features a unique hedging instrument that shields Ignite Power from currency fluctuations. This mechanism allows the company to receive funds in USD and repay in Naira, based on the exchange rate at the time of repayment. By mitigating exchange rate risks, this instrument provides a stable financial environment for Ignite Power to deploy and operate its projects, ultimately benefiting its customers.
This financing agreement propels Ignite Power toward rapid growth. Its commercial and industrial subsidiary, Westa, has already installed 3 MW of solar energy in West Africa and plans to significantly expand its operations with this new investment. According to Yariv Cohen, Ignite Power’s CEO, this partnership with Afrigreen is a game-changer for the company and the West African solar sector. Owing to the growing demand for clean, reliable, and affordable energy, particularly in Nigeria, this financing enables Ignite Power to offer innovative financing solutions, making solar energy more accessible to businesses without upfront capital requirements. This investment presents a unique opportunity to revolutionize West Africa’s energy sector, transitioning to a distributed, sustainable, and clean energy model.
Vincenzo Capogna, Managing Director of Westa Solar, noted that Nigeria’s commercial and industrial sectors hold vast potential for solar energy adoption. As businesses grapple with unreliable grid power and escalating fuel costs, Westa Solar’s solutions offer a reliable, cost-effective, and eco-friendly alternative.
This investment will accelerate the company’s growth, enabling it to bring more projects online and contribute to a transformative shift in the region’s energy landscape.
Alexandre Gilles, Managing Director of Afrigreen fund advisor, expressed enthusiasm about the partnership with Ignite Power, a pioneering player in the commercial and industrial solar market. He cited Ignite Power’s impressive project delivery record and the vast market potential in Nigeria and West Africa as key factors making this collaboration exciting. Gilles emphasized that the investment aligns with Afrigreen’s mission to support impactful renewable energy projects, and he looks forward to the positive impact on the region’s energy landscape. Gilles also highlighted the significance of the innovative hedging instrument developed with the IFC, noting that such creative financing solutions are crucial for supporting impactful operations in emerging markets. By mitigating currency risk, this financial structure enables companies like Ignite Power to expand their clean energy solutions more effectively, even in challenging economic environments.
The West African commercial and industrial solar market is on the cusp of rapid expansion, with projected installed capacity exceeding 500 MW in the near future. “As the region’s industrial and commercial sectors grow, they are increasingly adopting solar energy to reduce their reliance on costly and environmentally damaging fossil fuels. Considering Nigeria’s leading the charge, Ignite Power’s expansion is poised to drive a broader energy transition in the region, providing businesses of all sizes with reliable, sustainable, and affordable power”.
The $15 million investment from AFRIGREEN will significantly expand Ignite Power’s presence and accelerate the rollout of solar energy solutions, driving economic growth and environmental sustainability across West Africa. By pairing innovative financing options with advanced solar technology, Ignite Power and Westa are poised to spearhead the transition to renewable energy in one of the world’s most rapidly expanding markets.