IFC, a member of the World Bank Group, and FMO, the Dutch development bank, have invested in Mobisol, a pay-as-you-go solar energy service company, to deliver renewable energy solutions to off-grid communities in East Africa.

IFC’s equity investment of €5.42m and €9.2m from the Access to Energy Fund (AEF) and MASSIF Dutch government funds managed by FMO, brings them into partnership with Investec Asset Management’s African Private Equity Fund and DEG, which have already invested in Mobisol.

“The funds made available through the AEF and MASSIF will support sustainable energy solutions and steady access to energy for low-income households. This will eventually boost economic development, which fits FMO’s main inspiration to manage these funds on behalf of the Dutch Government”, said Linda Broekhuizen, CIO at FMO.

The financing will help accelerate Mobisol’s growth in existing markets in Rwanda and Tanzania, and to support its expansion into Kenya.

Mobisol has designed modular solar home systems, a clean, safe and affordable alternative to fossil fuels for low-income African households.

Designed specifically for the African market, the high-quality systems are powerful enough to meet the entire energy needs of an off-grid household, powering lighting, radios, stereos and TVs, and other household appliances such as fridges.

In addition to household use, many small businesses are also generating incremental income from their Mobisol systems by providing mobile phone charging services, running barber shops or village cinemas.

Mobisol has already installed over 67,000 solar home systems in Rwanda and Tanzania, giving access to electricity and the use of efficient appliances to over 330,000 consumers.

The system is paid off by customers over three years via mobile money.

This innovative payment approach keeps the cost of an entry-level Mobisol system similar to what the typical customer spends on kerosene, candles, batteries, and mobile phone charging while offering superior value.

Thomas Gottschalk, Founder and CEO of Mobisol, said: “Our partnership with IFC and FMO, alongside Investec Asset Management marks an important milestone in the growth history of Mobisol. We are excited by the value such a reputable list of global investors stand to bring to Mobisol. We can now concentrate on scaling and even better serving our customers.”

Approximately 600 million people lack access to electricity in Sub-Saharan Africa.

Climate change is also a significant concern, as the region is hardest-hit, while its residents are the least-equipped to handle the impacts.

This investment builds on IFC’s pioneering work to support the development of solar off-grid energy markets through its Lighting Global program.

As an associate of this program, Mobisol has received IFC advice on how to verify the quality of its products, market them and expand its reach on the basis of sales trends.

IFC is also committed to promoting access to financial inclusion in Africa, encouraging the use the mobile payment technology to allow customers at the bottom of the pyramid to access affordable digital financial services.

Oumar Seydi, IFC Director for East and Southern Africa, added: “IFC’s investment in Mobisol reflects our commitment to bridging the infrastructure gap and to mitigating climate change by delivering reliable, clean and affordable alternatives to fossil fuels for lower income households in Sub-Saharan Africa.”

“Our partnership with Investec Asset Management, FMO and DEG will help deliver the Mobisol solar home systems to other parts of Africa,” he said.