Nigerian solar energy provider, Daystar Power is starting this year on a good note. With $38 million new funding from Investment Fund for Developing Countries and Morgan Stanley Investment Management and other investors, the firm will be looking to expand solar access across West Africa.
“Sunray Ventures founded Daystar Power to address one of West Africa’s most significant barriers to economic development — access to reliable and affordable power. We are happy that this transaction will provide Daystar Power with the required financing to continue to lead in off-grid solar for commercial and industrial customers in West Africa,” said Christian Wessels, Co-Founder of Daystar Power and Sunray Ventures.
Here Is What You Need To Know
- The round was led by the Investment Fund for Developing Countries (IFU), the Danish development finance institution (DFI). 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 $48 million.
- With the latest funding, the company plans to expand its installed power capacity to 100 megawatts from the current 23 megawatts. The new capital will also allow Daystar Power to accelerate its growth in key markets like Nigeria and Ghana, and open up in countries such as Côte d’Ivoire, Senegal and Togo.
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Why The Investors Invested
“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, it is helping to accelerate the adoption of renewable energy in some of Africa’s fastest growing cities,” said Thomas Hougaard, Vice President Sub-Saharan Africa, IFU.
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“STOA is excited to start this journey alongside Daystar which is perfectly positioned to provide reliable, environmentally friendly and cheap electricity to businesses across West Africa. This investment reflects a core part of our mission — we aim to invest more than 50% of our capital in Africa and in renewable energies,” said Charles-Henri Malecot, CEO, STOA.
“Proparco is delighted to support the growth of Daystar Power (DSP) which represents our third commitment under the ARESUF facility backed by the European Union. In line with Proparco’s objectives of improving energy access and reducing greenhouse gas emissions, this funding will enable DSP to expand reliable power supply at competitive cost to West Africa’s C&I sector,” Damien Braud, Head of Private Equity Africa & Middle East division, Proparco.
Nigeria, Africa’s largest economy only boasts of small-grid capacity of 2.8 megawatts as of 2019, with 52 of the 59 projects solar-powered, says Bloomberg. Only 55% of the country’s population is connected to the national electricity grid and those experience frequent power cuts of up to 15 hours per day.
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A Look At What Daystar Power Does
Founded in 2017 by the African venture builder Sunray Ventures, Daystar Power specialises in providing solar power and energy efficiency solutions for businesses in the commercial, industrial, and agricultural sectors that result in significant reduction of power costs, diesel consumption and pollution.
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Daystar Power counts the West African region’s leading industrial and commercial companies among its client base and is active in Nigeria, Ghana, Togo and Senegal with a representative office in Cote d’Ivoire. To date, Daystar has 23 MW of installed power capacity and has offset approximately 5,000 MT of CO2 to date.
“Morgan Stanley Investment Management’s Climate Impact Solutions fund seeks to generate compelling returns with a focus on helping to solve critical climate issues. Our aim in partnering with the team at Daystar Power is to help deploy clean energy at commercial scale — creating a positive, long-lasting environmental, health and financial impact in West Africa,” said Vikram Raju, Head of Climate Impact, Morgan Stanley Investment Management AIP Private Markets.
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