STOA, DFC and Proparco have joined FMO and other existing investors in a $43m equity investment in mini-grid leader Husk Power Systems.

The funding will accelerate the rollout of mini-grids in rural and peri-urban Nigeria and India, enabling increased access to clean, affordable, reliable, and modern energy. 

“The mini-grid sector is key to achieving access to electricity for all and to accelerate the energy transition in rural areas. This is STOA’s first investment in the sector: we were impressed by the track-record and the performance of Husk that together result in a very competitive solution in terms of cost and reliability,” said Jean-Pierre Barral, Deputy CEO of STOA. 

“This investment in Husk, which will fund the rollout of new mini-grids in India, Nigeria and possibly other African countries, perfectly aligns with STOA’s mandate as an impact investor with a focus on emerging markets and climate change mitigation.”

Husk builds, owns and operates mini-grids that help catalyze economic growth in rural India and Africa. The company has the largest fleet of community solar mini-grids across the two continents, with 200 operational mini-grids and aims to double its footprint in the next 12 months. Its innovative approach combines solar energy, batteries, and backup sources to ensure round-the-clock access to clean and affordable power for small businesses and households. 

Since pioneering the community mini-grid in 2008, Husk has expanded its business model to not only provide energy access but also facilitate the transition from fossil fuels to renewables. This evolution includes the sales and finance of energy efficient appliances, turnkey commercial and industrial (C&I) rooftop solar and a range of low-carbon and climate-resilient energy services, including agro-processing and irrigation. 

In 2022,  Husk turned its first profitable quarter in both Africa and Asia, with a positive Q4 EBITDA in its two primary markets Nigeria and India. 

In early 2023, the company launched a public-private partnership proposal in view of fast-tracking the deployment of mini-grids in the least developed countries. 

More recently, the company announced its ‘Africa Sunshot’ initiative, an ambitious plan to contribute to the achievement of universal energy access by 2030. 

This plan includes the goal to operate a fleet of 2,500 minigrids in off-grid and weak-grid communities in rural Sub-Saharan Africa.

According to the International Energy Agency, more than 700 million people worldwide lack access to electricity, with the majority residing in Africa where the electrification rate of the 33 least developed countries is only 36%. 

Solar mini-grids can play a significant role in improving energy inclusion. To meet the growing energy demand, it is estimated that a substantial number of new mini-grids need to be built before the end of the decade. This significant investment push is supported by energy access programs funded by the World Bank and other donors, including in Husk’s core markets.

“We are excited to have STOA lead this financing, which will enable us to fully deploy our AI-powered renewable energy platform in Sub-Saharan Africa and India, and unleash a rural industrial revolution. It is also a clear signal to governments and investors that the minigrid industry is fully bankable and ready for primetime,” said Manoj Sinha, Husk’s CEO.