Late last month, Gridworks, a UK government-backed investor in Africa's electricity networks, announced it would invest up to US$50 million in Virunga Power, a company that creates and operates hydro-backed distributed renewable power generation projects and grid distribution networks in East and Southern Africa, such as Burundi, Malawi, Zambia, and Kenya.
CEO of Virunga Power, Brian Kelly, said, "We’re thrilled to be able to announce this transformational investment from Gridworks." An investment of this magnitude validates the approach we take to bringing clean and affordable power at scale to rural areas. "Our pipeline and portfolio of utility projects continue to grow, and we will use the capital and expertise from Gridworks to expand electricity access and drive economic and industrial growth in communities across the region."
To help people not adequately covered by national utilities, Virunga Power collaborates with local developers and rural communities to bring about long-term economic development and electricity. For rural communities to have more affordable access to electricity and to strengthen the national grid, the firm employs run-of-river hydropower technology and focuses on projects up to 20 MW, as well as accompanying transmission and distribution networks.
Gridworks' focus on rural electrification comes as governments, donors, and policymakers try to meet connectivity objectives set by the United Nations' Sustainable Development Goals. The World Bank reports that rural electrification rates of 15%, 6%, and 2% in Zambia, Malawi, and Burundi are among the lowest in the world.
With the help of power, Virunga Power helps the newly connected villages start businesses and earn money. The business collaborates with regional financiers and community organizers to support the growth of energy-use ecosystems at the residential, municipal, and commercial levels. One example is assisting buyers in acquiring equipment that will increase crop yields and hence the farmer's revenue.
Leading investors in early-stage energy access and renewable energy enterprises in Africa, such as the European Union's (EU's) Electrification Financing Initiative (EDFI ElectriFI) and Camco's Renewable Energy Performance Platform (REPP), are now backing Virunga Power. They pooled their resources to provide Virunga Power with crucial expansion funds during its Series A investment round, which concluded in 2019.
According to EDFI Management Company's ElectriFI Manager Jean-Denis Collin: "Over the past four years, EDFI ElectriFI, sponsored by the European Union, together with Power Africa and the governments of Sweden and Italy, were instrumental in validating the model and further securing a pipeline of run-of-the-river hydro projects in East Africa. Gridworks’ investment is timely and catalytic; it brings additional expertise and capital to further convert the pipeline and build a strong hydro-powered rural utility platform in Southern and Eastern Africa. "Congratulations to all involved."
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