Investing USD 20 million in solar energy for SMEs in India and South Africa

June 10, 2024

The Climate Investment Fund, managed by Norfund, is investing USD 20 million (NOK 210 million) in candi solar, a company that supplies solar energy to small and medium-sized enterprises in India and South Africa.

“There is great untapped potential in these countries in giving smaller businesses access to affordable and clean energy from solar power,” says Sofie Kamsvåg, Investment Manager at Norfund.

India and South Africa have need more energy as a result of strong growth in consumption, and coal is the largest source of energy. The Climate Investment Fund has previously invested in large solar and wind power plants in these countries, and in a company that supplies renewable energy to larger companies in India.

Now, for the first time, the fund is investing in a company aimed at smaller businesses. The USD 20 million investment in candi solar is part of a larger funding round totalling USD 38 million for the company, which was established in 2018. Kyuden International and STOA account for the rest of the sum.

“Electricity from rooftop solar is generally cheaper than what companies can buy from the grid, but small businesses often lack access to affordable enough capital to invest in these solutions”

Sofie Kamsvåg, Investment Manager Norfund

Candi solar has developed financial solutions specifically aimed at such businesses and can offer various deals tailored to their needs, including risk-sharing leases, credit repayments and loans.

“Our innovative solar and battery solutions and pioneering financial products accelerate our purpose of powering a more sustainable planet, one rooftop at a time”

Fabio Eucalipto, Co-founder and Director at candi solar.

The companies candi has delivered solar solutions include everything from textile industry in India to one of South Africa’s largest rugby stadiums in Durban.

Access to affordable capital contributes to avoided emissions

Candi solar has so far delivered solutions with an average capacity of 600 kWp to over 100 companies in the two countries. In total, they have contracts for 112 MW of solar energy. With the capital from Norfund and the other partners, the company has set a target of building a further 200 MW in solar projects over the next two years.

The total expected energy production of 571 GWh will avoid 493,000 tonnes of CO2 annually, calculated based on the two countries’ current and planned energy mix. This is equivalent to the emissions of 250,000 Norwegian fossil-fuelled cars.

– The rapidly growing demand for energy in India and South Africa means that there is a major shortage of the capital needed to base growth on renewable energy. Solar energy delivered directly to smaller businesses is an important part of the solution,’ says Kamsvåg.