January 20, 2023
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.
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.