Indian company Orb Energy has announced it has raised more than Ksh 1.5 billion (US$15) million in equity and debt investment to grow its in-house finance facility of rooftop solar for small and medium sized enterprises (SMEs) in India and to further expand its Kenya operations.
Founded in 2006, Orb Energy has sold more than 150,000 solar systems in India, with cumulative installations of more than 30MW of rooftop solar systems. It started African operations in Kenya in 2014, where it seeks to replicate its India model.
This funding round includes investors such as the Netherlands Development Finance Company (FMO), which provided US$4 million in equity, and a loan from the Overseas Private Investment Corporation (OPIC) of US$10 million. These funds will be used to grow Orb’s in-house platform in India that provides finance to SMEs looking to reduce electricity costs through ownership of a rooftop solar system.
Additionally, Orb raised more than Ksh 103.2 million (US$1 million) for its solar operations in Kenya. Pamiga, an investor in African finance institutions and SMEs, provided US$500,000 in equity, and US$550,000 came from DEG – Germany’s development finance institution – using funds from the German Federal Ministry for Economic Cooperation and Development’s (BMZ) Upscaling Programme.
These funds will be used to further expand Orb’s residential and commercial solar business in Kenya, where it has sold more than 10,000 systems since 2014.
“We are extremely pleased that FMO increased its equity position in Orb Energy, adding US$4 million to its earlier investment of US$2 million in 2015,” said Damian Miller, Orb’s CEO. “We see this as a vote of confidence in our unique approach to the solar market in India, which has allowed us to leverage a further US$10 million from OPIC to expand our finance platform for SMEs looking to save money on their electricity bill with their own rooftop solar system.”
Orb offers a finance facility to SMEs that matches their payback period, after which all their power is effectively free. The credit check is quick, often completed in less than seven days, and its finance products require no collateral. This easy access to reasonable cost finance is driving solid growth in Orb’s commercial sales of rooftop solar systems, Miller said.
“We like the progress that the Orb team has made in the commercial and industrial rooftop space in India,” said Jurgen Rigterink, CEO of FMO. “Orb has demonstrated through its unique in-house finance facility and vertically integrated approach that profitable growth is possible in this fast moving, highly competitive segment of India’s solar market. We fully expect to see Orb emerge as one of the solar leaders of India in the years to come.”
“Enabling customers to access reasonably priced financing helps SMEs generate their own power and save money,” OPIC CEO Ray Washburne said. “OPIC is proud of its partnership with Orb and looks forward to supporting access to energy in these developing markets.”
Story Credit: ITWEB AFRICA