With this operation, Norfund, the Norwegian investment fund for developing countries, makes its first investment in renewable energy in Sri Lanka. 

Greenpower SL, a France-based renewable energies producer, has announced today the conclusion of a USD 4m capital raising designed to accelerate the implementation of its solar projects in Sri Lanka. This fundraising will allow Greenpower SL to accelerate the construction of solar power plants, developed and installed on the roofs of Sri Lankan schools by its local partner Gaia Greenenergy Group.  

More than 500 schools already equipped with solar roofs 

Since 2021, Gaia and Greenpower have been installing PV solar rooftops on Sri Lankan schools and hospitals. Having commenced in the Uva Region, with over 500 schools equipped as of Q1 2023, the Franco-Sri Lankan IPP is now seeking to launch the construction of similar assets in two new provinces in the coming weeks. The combined initial investments of Norfund and Greenpower will support the overall construction of photovoltaic assets 44 MWp, to be commissioned in 2023 and help further secure the pipeline. This capacity is expected to generate  around 64 GWh per year, thus avoiding more than 41,000 t CO2 eq. per year.  

The investment is made from the new Norwegian Climate Investment Fund that was set up last year to be managed by Norfund, with the goal of alleviating greenhouse gas emissions by investing in renewable energy in developing countries with large emissions from coal and other fossil fuel consumption. Sri Lanka is one of eight prioritized countries for the new fund. 

Building an independent producer of renewable electricity in Sri Lanka 

At the closing of this operation, Greenpower will keep a majority control of its assets, and will continue to play a strategic assistance role to the local based teams of Gaia. Greenpower will from now on be aided by the expertise in the clean energy sector built up by Norfund’s team in the past years.  

Inge Stølen, Investment Officer for Norfund, said: “We are excited by this first investment in the renewable energy sector in Sri Lanka, which is a territory we know well having invested in the past in the insurance and banking sector. We believe that renewable energy is part of the answer for the key challenges faced by Sri Lanka in terms of climate change and economic dependence on oil, gas and coal imports.”  

“We are obviously proud that Norfund, whose expertise is widely recognized in the renewable energies sector in the emerging countries, is joining us. Its arrival validates the choices we have made so far to develop a 100% renewable energy IPP in Sri Lanka and to achieve this goal while maintaining the highest ESG standards”, said Pierrick Morier, chairman and co-founder of Greenpower. Sivaaji de Zoysa, founder and CEO of GAIA confirms: “Having Norfund as co-investor alongside Greenpower is a major step forward for our projects. The in-depth understanding and experience of Greenpower and Norfund of energy markets will help us to further scale-up our activities”. 

Sri Lanka is committed to the energy transition 

According to the Ministry of Economy, Finance and Recovery, Sri Lanka remains extremely reliant on fossil fuels for the production of its electricity, while the installed capacity remains insufficient to meet growing demand. The Government however supports and encourages the development of renewable energies. It has set itself the goal of increasing their renewable contribution to 70% of electricity production by 2030. The main development potential identified lies in solar and wind capacities.  

Norfund and Advances Finance and Investment Group (AFIG Funds) announce the joint acquisition of Nouvelle Mici Embaci (NME) to scale up its operations and roll out an ambitious modernization plan and regional growth strategy.

Nouvelle Mici Embaci, a subsidiary of Carré d’Or Group, is a leading packaging company in Côte d’Ivoire and Francophone West Africa. It was founded in 1983 and manufactures corrugated packaging as well as polypropylene bags and provides industrial printing services. NME’s customers are among the leading local and multinational companies in the region, a testament to the Company high-quality packaging solutions and excellent service delivery. NME directly employs over 1,000 people and is a leader in recycled paper-based packaging.

NME has demonstrated resilience over the years, recording growth and profitability despite the global shocks of Covid-19 pandemic and heightened tension in Europe.

Norfund and AFIG Funds have partnered with Bridge Bank Cote d’Ivoire and Mauritius Commercial Bank (MCB) to provide necessary acquisition financing and working capital facilities to scale the business to its next growth phase.

The co-investors will partner with the existing management team as they continue to grow the business and expand its portfolio of packaging solutions.  

This acquisition will aim to modernise NME’s operations and expand its customer base while instituting international standards in corporate governance and environmental sustainability. We are excited and proud to be part of such a landmark transaction for the industry in the Cote d’Ivoire as well as for the West African region

Fabrice Mpollo, Investment Manager, Norfund.

Carré d’Or Group will remain  a strategic customer of NME in the long term and will provide necessary support as may be required post-acquisition.

“This is the outcome of a constructive engagement to find the right partners to take over Nouvelle Mici Embaci. We are delighted to announce the sale of NME to a renowned group of investors. They have shown us the best approach and capabilities to scale up this business. This was important to us as our conglomerate intends to remain a loyal customer of NME. ‘Passing the baton’ to an able buyer with a track record of adding value to their investments is the most logical way for us to ensure the Company’s sustained growth. We look forward to continuing to support NME in a different capacity.”

Mr. Emile Abi-Aad, Deputy General Manager of Carré d’Or Group

The local corrugated paper market is estimated at 80,000 tons annually and is growing at approximately 10% per year, boosted by population growth, change in consumption habits, and higher demand in packaging as a result of industrial investments and growth in hyper-distribution, which indicate positive outlook for market players.

“This investment is our first in the Ivorian manufacturing sector and represents an important opportunity to support the management team to continue to serve as a key supplier partner and provider of high-quality solutions to many companies in the Ivorian and francophone West African markets. We look forward, along with AFIG, to supporting the management team to drive sustainable growth and expansion, to further institutionalize, and to scale its recycling capacity and thus contribute to the development of a circular economy within the region”

Naana Winful Fynn, Regional Director for West Africa, Norfund

“We are pleased with this acquisition of NME and our partnership with Norfund, Bridge Bank Cote d’Ivoire and Mauritius Commercial Bank. Innovation in the African financial system requires vision and perseverance, but this deal would not have been possible without the support and patience of our investors in AFIG Fund II, as well as the trust of a discerning seller in Carré d’Or Group. Now the real work begins to leverage on the building blocks put in place by Carré d’Or Group and implement new growth initiatives to fulfil the Company’s potential to be a true regional champion in the packaging industry.”

Mr. Papa Madiaw Ndiaye, CEO of AFIG Funds

Norfund invests through funds to reach more companies and other business areas than we can on our own. The fund managers contribute to develop local, sustainable companies based on regional expertise, industry insight and efficiency initiatives.

One of the funds we invest through is Novastar, which has the Nairobi-based circular waste company Regen Organics in its portfolio.

Fund investments in Norfund

Norfund’s has three objectives when investing in funds:

• Gain access to markets and segments in need of investments outside Norfund’s expertise
• Reach businesses in challenging business environments outside of Norfund’s direct reach
• Contribute to develop local businesses and improve business practices by utilizing competence and resources of local fund managers

Our fund managers possess local knowledge, industry insight and capabilities to grow SMEs (Small and Medium Enterprises). Norfund therefore sees fund managers as a valuable way to access investment areas that otherwise would be difficult. They create value through active ownership and professional expertise and provide local knowledge to support the company’s development and growth.

Novastar

Novastar is one of the first and largest global venture capital investors in Africa. With offices in Lagos, London and Nairobi, Novastar partners with transformative businesses forging solutions to Africa’s biggest problems and creating lasting, inclusive value for the many, for people and planet.

Since 2014, Novastar has backed the bold entrepreneurs that provide essential goods, service and economic opportunity to everyday consumers and producers in the fast-growing, often informal African markets where they live, work and shop. Norfund has a long-standing relationship with Novastar and has participated in both their funds to date.

Novastar has established an exciting portfolio with companies such as BasiGo, which offers public transportation through cost-effective electric buses, and Ignita which helps farmers battle the effects of climate change by providing hyper-local and accurate weather forecasts to farmers in the most remote areas. You can read more about Novastar’s portfolio here.

Today, Novastar has an active portfolio of 24 companies across two funds. One of these companies is Regen Organics.

Regen Organics

Two of the world’s most difficult challenges are food insecurity and safe waste management. These issues are particularly prominent in developing economies with 98% of the world’s undernourished living in developing countries and waste generation in the same economies expected to increase threefold by 2050.

Regen Organics, a Nairobi-based company, aims to solve those problems. The company utilizes a circular economy approach to create organic fertilizers and animal feed inputs from organic waste, creating value from waste around Nairobi. The company has quickly become a leader in regenerative agriculture in Kenya and is aiming for expansion to other parts of East Africa.

Regen Organics’ fertilizers are made from locally sourced organic waste, such as food and sanitation waste, which is processed using a proprietary method to create high-quality organic fertilizers. These fertilizers are rich in nutrients, including nitrogen, phosphorus, and potassium, and are designed to enhance soil health and fertility, increase crop yields, and improve the quality of produce. Regen Organics’ approach to fertilizer production is sustainable and environmentally friendly. By utilizing a circular approach, the company is able to reduce waste and pollution while producing a valuable product for farmers.

The creation of the fertilizer involves several steps:

1. Collection: Organic waste materials such as food scraps,      sanitation waste, and agricultural residue are collected from various sources. Regen Organics works with waste management companies, households, and farms to obtain these materials but operates the transportation of waste to the factory themselves. By sourcing waste from around Nairobi they are mitigating the amount of waste that ends up in nature while creating an ecosystem for waste management.

2. Sorting and preparation: The collected waste is sorted to remove any non-organic materials such as plastics and metals. The organic materials are then shredded and mixed to create a uniform feedstock for the next step.

3. Feeding the black soldier fly larvae: The mixed feedstock is fed to black soldier flies in a controlled environment. The larvae can consume large amounts of organic waste and feed for around 2 weeks before it reaches optimal size for harvesting.

4. Harvesting the larvae: Once the larvae have consumed the feedstock, they are harvested and processed to create a protein-rich additive for animal feed. The harvested larvae can be dried, ground, and mixed with other ingredients to create a balanced feed for animals such as poultry, fish, and pigs, replacing unsustainable protein sources like fishmeal and soya.

5. Composting: The residue from the larvae production is combined with carbon-rich organic waste streams and is further processed through a composting stage, where it is mixed with other organic materials and allowed to decompose under controlled conditions. The composting process produces a rich, nutrient-dense soil amendment that can be used as a fertilizer.

In addition to organic fertilizer, Regen Organics makes biomass briquettes that can be used for industrial purposes – including Regen’s own boilers – and replace fossil fuels.

Through their products Regen Organics is committed to supporting smallholder farmers in East Africa by providing them with access to high-quality, affordable organic fertilizers and animal feed, while also offering training and support to help them adopt sustainable agriculture practices and improve their yields and incomes.

Development effects

Through their circular economy approach Regen Organics has several positive impacts. By utilizing organic waste as an input, the company upcycles over 60,000 tons of residual organics annually, reducing waste and carbon emissions, and offsetting 50,000 tons of carbon. This approach promotes sustainable agriculture and addresses critical challenges such as waste management and climate change.

Secondly, Regen Organics’ fertilizers and animal feed are affordable options for small-scale farmers, making them accessible for most agricultural producers in Kenya. This accessibility helps improve soil fertility, crop yields, and animal health, contributing to poverty reduction and food security. Today more than 8,000 farms have adopted regenerative practices and benefit from this.

In addition, the successful establishment of the factory in Nairobi has created 500 direct jobs and 2,000 indirect jobs. With the newly raised capital Regen Organics will be able to scale up their production and by adding another factory the demand for workers will increase resulting in higher job creation. 

Overall, Regen Organics’ circular economy approach has several positive development effects, including reduced waste and carbon emissions, improved access to affordable and sustainable agricultural inputs, capacity building for small-scale farmers, and recognition of innovative approaches to sustainable agriculture. These effects can contribute to a more resilient and equitable food system, promoting sustainable development in Kenya and beyond.

How capital from Novastar helps Regen Organics expand

Regen Organics’ fertilizer and animal feed has proven to be in high demand across Kenya and the company needs to scale up production to be able to meet that demand. With farmers experiencing an increase in yield of up to 30% in horticulture and prices for fertilizer increasing as a consequence of the war in Ukraine, Regen Organics has raised a new round of capital to expand its capacity as locally produced fertilizer is in high demand. This will be done through increasing capacity at the existing factory in Nairobi and building a second factory in western Kenya to be able to secure more organic waste and have better control on the value chain. 

The process of handling the waste takes six months from when it arrives at the factory until it leaves as fertilizer, requiring substantial amounts of working capital to secure enough organic waste as input. Managing Director Michael Lwoyelo explains that the long-term goal is to expand the capacity to be able to process 1,500 tons of waste a day, five times higher capacity than today. With the expansion of a second factory the plan is to expand across Africa.

“Novastar are very active owners with their participation in the board, with strong ESG focus, and it’s a benefit for us that they have a long-term ownership horizon which in turn helps us grow at the right pace,” Michael added.

Lack of access to finance is regarded as the most important constraint to the development of businesses in low-income countries and Colombia is no different with just 46% of the population over 15 holding bank accounts, according to World Bank indicators.

Contributing to increased financial inclusion is a key priority for Norfund in this target market. Now, Norfund has closed a USD 8MM eq. peso denominated loan with Kredit in Colombia to support its lending program to teachers and pensioners.

Loans taken with Kredit are often used to help families consolidate their debt, to improve their credit scores and become bankable and to invest in home improvements, health, and further education for family members. These loans contribute to an improved quality of life for borrowers and play an important role in economic development.

Kredit counts with 56 agencies and 19,000 clients in different cities in Colombia including some of the most rural areas.

Through a new fund Norfund will contribute to giving 30 million people access to clean drinking water in Africa and Asia. 

Today, 2 billion people lack access to clean drinking water. Climate change, population growth, and urbanization mean massive investments are needed to reach UN Sustainable Development Goal 6 of access to safe water, sanitation and hygiene, but it has been challenging to mobilize capital to the sector. 

Together with six private and public investors, Norfund is entering the first investment fund directly aimed at investments in clean drinking water in Africa and Asia. Norfund is contributing 5 million EUR (55 million NOK) to the Water Access Acceleration Fund (W2AF). 

“We are seeing a growing number of companies developing solutions to offer reasonably priced, clean drinking water. Through this fund we can help these kinds of companies get the capital they need to grow and help meet the large and growing need for more water”

Delphine Gilbert, Investment Manager in Norfund

According to the World Bank, developing countries lose around 260 billion USD annually due to poor water supply. It’s estimated that each dollar invested in clean water yields a four dollar reduction in health costs. 

Norfund sees huge potential to make a difference through water investments and has explored the sector in recent years. In 2021 Norfund invested in TransAfrica Water Systems, a company that delivers water pump solutions, water treatment, and solutions for waste management in Kenya and Tanzania. However, it has been difficult to find projects that are commercially sustainable. 

“Various challenges and different types of risk mean that many promising projects fall apart before it is possible to make an investment decision. We have unfortunately looked at a number of possible projects that have not come to fruition,” says Gilbert. 

The W2AF fund is the first of its kind, with a combination of commercial private capital, development finance institutions, and aid money to relieve some of the risk – so-called blended finance. 

“The goal is that the new fund, by taking higher risks, can show that the business models can deliver, and thus also show the way for other investors in the water sector, so that even more people can have access to affordable and clean water,” says Gilbert. 

The fund initially aims to commit 35 million USD, with the intention of later doubling that amount. The investments aim to provide 20 billion liters of water to 30 million people who currently lack access in Africa and Asia. 

Norfund increased its investments in developing countries by over 20% to a record high 6.5 billion NOK in 2022.

“We are proud of the increased contributions we have made to creating jobs, fighting poverty, and avoiding emissions, in a time when many others are pulling capital out of the world’s poorest countries despite needs there being greater than ever.”

Tellef Thorleifsson, Norfund CEO

Investments had also previously increased during the pandemic in 2021 and 2020, with 10% and 20% respectively.

Norfund has received 1.68 billion NOK from the Norwegian state development budget over the last two years, with the aim of creating jobs through investment in sustainable businesses in developing countries. In 2022 Norfund also received an additional 1 billion NOK for the first time through the new Climate Investment Fund, matching 1 billion from Norfund’s own capital.

However, Norfund invested almost 2.5 times the total amount transferred.

The new Climate Investment Fund is Norway’s most important tool in accelerating the global energy transition by investing in renewable energy in developing countries with large emissions from coal and other fossil power production. The fund became operative in May 2022. Norfund rapidly invested just under 2 billion NOK.

Just over 1 billion was invested in various energy projects, 1.8 billion was invested in businesses related to financial inclusion, and the rest went to businesses in agriculture, industry, and infrastructure.

“We are satisfied with having increased our investments significantly through three years with a pandemic and now the ripple effects of the war in Ukraine. These events have made it especially difficult for developing countries to attract the capital needed to create jobs and escape poverty,” says Thorleifsson.

New challenges – and new opportunities

Norfund made several investments throughout the last year related to local food production.

“Increased food prices as a result of the war in Ukraine is an enormous challenge, but increased import prices also open up new opportunities to instead build up local production,” says Thorleifsson.

A combination of a difficult business environment and increased interest rates have led to investments in developing countries stalling again, despite an initial hope for recovery post-pandemic.

Increased subsidies to renewable energy in the West, with the USA’s Inflation Reduction Act at the forefront, have also made investors less willing to prioritize energy investments in developing countries.

“We see an increasing need for renewable energy investments in the priority markets of the Climate Investment Fund, and we are able to contribute efficiently to avoid large scale emissions,” says Thorleifsson.

Norfund is entering the African textile industry for the first time, launching two investments in Kenya.

“The textile industry can create a large number of jobs that give the fast-growing young population the opportunity to work their way out of poverty. Norfund also aims to contribute to handling some of the challenges in the industry”, says William Nyaoke, Norfund’s regional director for East Africa.

The covid pandemic and increased perception of political risk have increased the pressure on differentiation and developing alternatives to Asian textile production.

Two investments in Kenya’s textile industry

Norfund is investing in two textile manufacturers in Kenya, in line with our aim to create jobs and improve lives through investing in sustainable businesses:

• The Balaji Group is one of the leading manufacturers of clothing in Sub-Saharan Africa, with 12 000 employees and production both for the local Kenyan market and for export, for brands such as Wrangler, Lee and H&M. Norfund and Ethos Mezzanine partners, one of Africa’s most renowned investment companies, together invest USD 25 million (12,5 million each) in Balaji. The goal is to create at least 6,000 new direct jobs and a further 6,000 indirect jobs in the company.

• Hela Apparel Holdings PLC is a Sri Lankan apparel supply chain solution provider with a global manufacturing footprint, which has established itself in Kenya, Ethiopia and Egypt, with over 10,000 employees across Africa. Hela works with some of the world’s leading apparel brands in the Intimate, Kids wear and Active wear product categories. Norfund’s investment of USD 14 million will support additional investment in the Kenyan manufacturing facility which will enhance productivity and create new employment opportunities. The company will also use the capital to build a sustainable local supply chain in East Africa.

Contributing to more sustainable production and good working conditions

The textile industry has been in the spotlight over both working conditions and challenges related to pollution, water consumption and climate emissions.

“We are aware that the industry faces a number of challenges and dilemmas. Our ambition is that Norfund as a responsible investor can contribute to strengthening the companies on sustainability and working conditions”

William Nyaoke, Regional Director, East Africa

The investment in Balaji will finance new modern washing machines that will triple production capacity, while reducing electricity use by 20-30%, water consumption by 70% and chemical use by 60%. The company has installed East-Africa’s largest rooftop solar plant of 1.8 MW to cover large parts of its energy needs, cutting 30% of its energy bills.

Norfund’s investment in Hela will contribute to a more sustainable value chain by producing larger parts of the value chain locally. The company has brought in two companies that will produce packaging materials and elastics in Kenya.

Opportunities for women

Most of the employees in the clothing industry are women who otherwise struggle to find work. Research has shown several positive effects for women as a result of the textile and apparel industry, such as increased school attendance and delayed marriage.

Hela has been conducting training sessions for its team members to educate them on topics such as; family planning, sexual health, and other life skills. The company also offers creche facilities for all female team members in Kenya with children between the ages of 4 months to 3 years during work hours, facilitating an easier return to work for mothers. Employees in Kenya are also given access to 20 Liters of clean drinking water that they can take home daily.

Abler Nordic is the new name of Nordic Microfinance Initiative, established in Oslo in 2008 as a public-private partnership investing in companies in Africa and Asia supporting low-income households with financial services.

At Abler Nordic, public investment capital between the respective Norwegian and Danish governmental funds for developing countries, Norfund and IFU, is blended with commercial capital from private investors, including Ferd, DNB, KLP and PBU Since 2008, public investment has been used catalytically to mobilize USD 140 million from private Nordic investors who see finance as a tool to enable positive and sustainable change in society.

As the financial inclusion field has developed over the past 15 years, Abler Nordic has evolved along with it. A focus on traditional microfinance matured into a broader approach of holistically including low-income households in the financial system through a range of services that enable people to strengthen their overall financial health and build resilience.

“Poverty has risen for the first time in 20 years and low-income people in developing countries are hardest hit by climate threats that they have contributed very little to. Well-designed financial services such as savings, leasing, agricultural financing, and affordable housing finance help people adapt and strengthen their ability to manage economic and climate shocks,” says Arthur Sletteberg, Managing Director of Abler Nordic.

“Our diverse investments in recent years and active engagement in the companies we are invested in is in line with the wider concept of financial inclusion, and it was time for our name to reflect this. Abler Nordic plays on the terms enable and sustainable and emphasizes our Nordic roots and values.”

Abler Nordic targets both strong social and sustainable financial results, and is a committed, responsible owner playing an active role in the development of 19 companies it is currently directly invested in.

As the same time as the new name is introduced, Anders Misund, partner in EQT, has been announced as the new Chair of Abler Nordic. He succeeds Bjarne Kveim Lie, Co-Founder and Managing Partner of Verdane, who has stepped down after 10 years of service.

“The UN says 5-7 trillion USD invested annually is needed to reach the SDGs, and mobilising private capital is critical to achieving this. Abler Nordic’s public-private partnership is more relevant than ever, and it is an honour to take the baton from Bjarne and support the company’s continued growth,” said Anders Misund, commenting on his appointment.

Norfund and a consortium of private investors managed by 54 Capital announce $21 million growth capital investment into Ethiopia’s largest FMCG platform SAMANU. Increased local production of edible oil will create jobs and increase food security.

SAMANU is a platform company with well-established brands operating in Ethiopia’s main FMCG sub-sectors (Tena Edible Oils, 555 and Aura Soap & Detergents, and Chef Luca wheat products).  

The investment by Norfund will fund the construction of a new solvent extraction plant to produce edible oils based on locally sourced sesame, sunflower and soya beans in its refineries. By reducing the dependency on imported raw materials, the investment aims to create jobs in value-addition and increase Ethiopia’s food security. The completion of a vertical integration project will also allow for increased export opportunities within the sectors the company already operates.  

Norfund, through our Business Support Facility, plans to use grant funding to assist contracted smallholder farmers with inputs like high quality seeds, fertilizers, training and capacity building, as well as agricultural technology to boost productivity. 

Andreas Davidsen, Norfund’s VP of Scalable Enterprises – Agribusiness & Manufacturing, said: “We are excited to partner with SAMANU and support the execution of their vertical integration strategy, creating jobs and increasing food security. We strongly believe in the opportunities of local food production in Ethiopia and Norfund looks forward to working closely with the SAMANU management team and 54 Capital to help implement best in class practises and solutions”. 

SAMANU is already home to some of Ethiopia’s leading FMCG brands and has ambitious plans to expand its product offering to meet rising demand for high quality locally produced brands. The investment, Norfund’s first in manufacturing in Ethiopia, signals strong institutional backing for the platform.  

Saad Aouad, 54 Capital PE Advisors’ Chief Investment Officer, said: “It is a fantastic achievement for our investments in Ethiopia and our local management team to receive further institutional backing. It stands as testament to what we have been able to achieve in terms of nurturing high-quality popular brands and achieving scale through capacity expansion and how we intend to develop the next stage of the business. This investment demonstrates the robustness of this strategy for further enhancing the value chain within Ethiopia which will undoubtedly benefit from Norfund’s extensive experience across the continent”.

About 54 Capital

54 Capital is a leading Africa focused Asset Manager, regulated by the FSC in Mauritius, with officers in Dubai, Morocco, and Addis Abeba, with a strong focus on Ethiopia. 54 Capital has built a portfolio of fast-growing assets in the pharmaceutical sector and the FMCG sectors in Ethiopia, making it the largest private equity investor in Ethiopia, with a total invested amount in excess of 200 million dollars. Its market leading investee companies are involved in the manufacturing and distribution of essential medicines, beverages, food products, as well as home care and personal care products.

40 million EUR has been secured from shareholders and lenders for the next phase of expansion for WeLight, providing access to electricity for hundreds of thousands of people and many businesses and communities in Madagascar.

Most of this funding will be invested in Madagascar and enable the company to connect 120 new villages (up from 50 WeLight-connected villages in Madagascar) over the next couple of years, providing electricity to rural households, businesses and communities across the country.

Madagascar has one of the world’s highest poverty rates as 81% of the population of Madagascar lives on less than $2.15 per day. 70% of the population of 30 million people live in rural areas with low incomes and negligible access to infrastructure. Only 15% of the rural population have access to electricity.  

It is estimated that more than 200,000 people living in the villages will experience access to electricity for the first time. Thousands of streetlights will light up the villages, which will improve safety and enable activities after dark. Entrepreneurs and businesses will be able to set up new endeavors which previously would not be possible, and secure new income streams. Schools, communities and medical centers will benefit from access to light and cooling facilities. The electricity will be generated in local solar based power plants installed in the villages by WeLight.

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WeLight Madagascar

WeLight not only brings electricity to villages, but creates an ecosystem for social and economic development of communities it serves. As an innovative, all-digital model created on and for the African continent, Welight contributes to financial, digital and energy inclusion. The company is working on initiatives such as entrepreneurship support in collaboration with German development agency GIZ and Axian Group. WeLight’s local sales agents have been trained to identify local entrepreneurs to participate in business training sessions and receive a subsidy for electrical appliances needed for their business activities. More than 50 entrepreneurs were supported in 2022.

This milestone funding round is a result of hard work, mostly from the team on the ground in Madagascar, which started in 2019 with two pilot sites and has grown to 40 sites in Madagascar and Mali. These two sites were established by Axian Group and Sagemcom, who at the time were active with telecom services in the two villages, and experienced high interest in the electricity from people in village. This led to the two minigrid pilots and subsequently the involvement of Norfund, which partnered with the group in 2019, and jointly embarked on a systematic approach setting up the company and providing funding to enable the first phase of the roll out of electricity services in Madagascar. 

Norfund welcomes European Investment Bank (EIB), EDFI ElectriFI -The Electrification Financing Initiative and Triodos Investment Management on board as partners, providing 19 million EUR in loans to the Madagascar activities.

Welight have also commenced activities in Mali with 5 pilot installations with further growth expected in the coming period.

“We at Norfund would like to extend great thanks to the CEO Romain De Villeneuve and the rest of the Welight team on the ground, Axian Group and Sagemcom for their dedication, excellent work and good cooperation! We look forward to the next chapter, in Madagascar, Mali and other countries which can benefit from WeLight’s services.”

Norfund Investment Director Pål Helgesen