Solar company Daystar Power secures US$38m Series B investment led by IFU to grow its operation

Image: WSP

NIGERIA – Daystar Power, a provider of hybrid solar power solutions to businesses in West Africa, has announced a Series B investment of US$38 million led by the Investment Fund for Developing Countries (IFU), the Danish development finance institution (DFI).

With the fundraise, Daystar Power will grow its operations in its key markets of Nigeria and Ghana, while deepening its presence in other regional countries such as Côte d’Ivoire, Senegal and Togo.

Daystar Power is on track to expand its installed capacity to over 100 megawatts, meeting demand from its clients in the financial services, manufacturing, agricultural and natural resources sectors. Daystar Power will continue to enhance its digital offerings and expand its local teams.

“African businesses are realizing that solar power stand-alone or in tandem with a second power source is a superior energy alternative to the often-unreliable grid or too expensive, polluting diesel generators.”

Jasper Graf von Hardenberg – CEO and Co-founder, Daystar Power

“We believe that Daystar Power has the right elements – the client base, technology, engineering expertise, and executive leadership to scale off-grid solar across West Africa. Not only is Daystar Power at the forefront of a growing market, but it is also helping to accelerate the adoption of renewable energy in some of Africa’s fastest growing cities,” Thomas Hougaard, Vice President sub-Saharan Africa, IFU, said.

IFU is joined by new investors STOA, a French impact infrastructure fund, Proparco, the French DFI, backed by a guarantee from the European Union under the African Renewable Energy Scale-Up facility (ARE Scale-Up) and Morgan Stanley Investment Management.

Taking into account the previous round by Verod Capital and Persistent Energy, Daystar Power has received equity investments totaling US$48 million.

“By offering our commercial and industrial clients cheaper, reliable and cleaner power, we have seen a more than 50-fold increase in power-as-a-service revenue over the last two years,” Jasper Graf von Hardenberg, CEO and Co-founder, Daystar Power said.

“African businesses are realizing that solar power stand-alone or in tandem with a second power source is a superior energy alternative to the often-unreliable grid or too expensive, polluting diesel generators.”

Private sector players dominate solar hybrid development in most parts of West Africa, with financial backing from development finance institutions, according to BloombergNEF 2020 report.

Nigeria, seen as the largest potential market for  mini-grid energy supply in West Africa, has received at least US$374m in the past ten years from international donors.

Africa’s largest economy had small-grid capacity of 2.8MW by 2019, with 52 of the 59 projects solar-powered, according to BloombergNEF. Only 55% of the nation’s population is connected to the national electricity grid and those experience frequent power cuts of up to 15 hours per day.

STOA, a French impact infrastructure fund and one of Daystar backers, seeks to invest over 50% of its capital in renewable energies across Africa, according to the statement.

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