NIGERIA – Nigerian startup Rensource Energy has raised a $20 million Series A round co-led by CRE Venture Capital and the Omidyar network.
The renewable energy company builds and operates solar-powered micro-utilities that provide electricity to commercial community structures, such as open-air trading bazaars.
Across marketplaces in West Africa and particularly in Nigeria, noisy, fuel-guzzling and pollution-producing generators are like an unwelcome, yet necessary business partner.
Lack of affordable and reliable electricity in Nigeria creates a massive real and opportunity cost to Africa’s largest economy.
For perspective, the West African country is roughly the size of Texas, with a 200 million population larger than Russia, and generates less gigawatt hours of electricity annually than the U.S. state of Connecticut.
Nigerian businesses (and citizens) adjust for these power deficiencies by spending on diesel fuel and generators.
The IMF’s 2019 Nigeria report quoted economic losses of $29 billion in Nigeria due to unreliable electricity supply.
On global Doing Business rankings, Nigeria ranked 169 out of 190 countries in the category of “Getting Electricity.”
This difficulty and cost weighs particularly heavy on Nigeria (and the continent’s) SMEs, which often operate in Africa’s informal economy — projected to be one of the largest off-the grid commercial spaces in the world.
TechCrunch noted that the benefit Rensource seeks to deliver to Nigeria’s SMEs — at a profit for itself — is lower overhead costs through better business practices and free them from the bane of generators.
Rensource’s micro-utility model deploys power clusters — made up of solar-panels, batteries and a power management system — adjacent to markets and commercial hubs.
Rensourse has used this model to become an off-grid energy provider in six states in Nigeria, and powers the Sabon Gari market — one of the country’s largest, located in northern Kano State.
According to Rensource co-founder Ademola Adesina, the company plans to use the US$20 million to expand to 100 markets within Nigeria and to additional African countries within 24 months, according to Adesina.