Solar isolated grids bolster energy supply in DRC - Camco
Camco is a climate and impact fund manager, working with stakeholders from across the public and private sectors to stimulate investment in sustainable, clean and equitable infrastructure and development in emerging markets.
- Investor: Camco – Renewable Energy Performance Platform
- Source of finance: Privat Capital Grant
- Financial instrument: Equity (preference shares and redeemable shares)
- Sector: Renewable energy
- Geography: Democratic Republic of the Congo
Camco is a climate and impact fund manager, working with stakeholders from across the public and private sectors to stimulate investment in sustainable, clean and equitable infrastructure and development in emerging markets.
This case study focuses on Camco’s critical intervention as the manager of the Renewable Energy Performance Platform (REPP), which is funded by UK International Development that bolstered the USD 40m Series B capital raise (comprising preference shares and redeemable shares) of renewable energy developer Congo Energy Solutions Limited (trading name Nuru).
For context, the Democratic Republic of the Congo (DRC) is one of the least electrified countries in the world, with less than 22% of its population having access to electricity as of 2022. The country relies heavily on hydropower, but aging infrastructure and climate change-induced droughts strain its energy production. Given the fragile context, the market is also considered high risk, which limits the interest of traditional investors. Goma – the region where the projects are located – is one of the most conflict-affected regions in the country.
Prior to the close of the Series B round in June 2023, Nuru had installed 1.7MWp of solar hybrid metrogrids in Goma, DRC, delivering clean energy to commercial, industrial and residential sectors, including solar-powered streetlights to improve the feeling of safety at night.
Having demonstrated the viability of the grids as a clean energy access solution for DRC, Nuru set its sights on scaling its operations with plans to roll out an additional 14.5MWp of projects. Its aim is to help close the energy access deficit in DRC, in doing so supporting DRC’s Strategic National Development Plan (SNDP 2019-2023) goal for increased renewable energy development and access to electrification in line with SDG 7.
Nuru’s Series B capital raise was primarily designed to provide sufficient development capital for this project portfolio. To de-risk the fundraise, the fundraise was designed as a blended finance transaction, targeting a diverse funder group and two financing instruments.
Although ultimately successful, the Series B capital raise hit a series of obstacles as it approached financial close, resulting in REPP making an initial investmentof USD 500,000 in March 2023 (alongside funding from Proparco and E3 Capital) to bridge a financing gap and bring the deal to financial close. REPP, once funds are fully disbursed, will have invested a total of USD 6 million alongside a consortium of international investors including International Finance Corporation (IFC), the Global Energy Alliance for People and Planet (GEAPP), Proparco, E3 Capital, Voltalia, the Schmidt Family Foundation, GAIA Impact Fund and the Joseph Family Foundation.
Following the Series B close, Nuru has undertaken work on two transformational projects in Goma and Bunia. The second Goma site is now at an advanced state of construction, and the Bunia site is expected to become amongst the largest off-grid solar hybrid metrogrids in Sub-Saharan Africa.
Once completed, the projects will provide first-time energy access to approximately 30,000 people, as well as improving the existing connections of approximately 146,000 people, 4,000 businesses and 100 critical services, most of which currently rely on diesel gensets for their power, and lead to the avoidance of 6,000 tonnes of carbon dioxide equivalent per year. This will lead to greater levels of economic activity and, it is hoped, improved living standards for the region’s communities.
Private Capital
The providers of private capital into blended finance transactions are usually investors with more flexibility and a higher risk appetite than institutional investors. This form of capital enables projects to build and scale up.
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