Nigerian Solar Firm Raises $38 million to Grow in West Africa

Lagos-based Daystar Power, West Africa’s fastest-growing commercial and industrial solar provider, has raised $38 million to aid in its regional expansion.

The Series B funding round was spearheaded by the Investment Fund for Developing Countries (IFU) – the Danish development finance institution (DFI) – along with the participation of STOA (French impact infrastructure fund), Proparco (French DFI) and Morgan Stanley Investment Management.

In addition to increasing installed power capacity to 100MW from its current 23MW, Daystar aims to aid in Nigeria’s energy transition by replacing high-emission diesel with clean and reliable solar power. The capital injection targets the expansion of existing operations in Nigeria and Ghana, as well as opening up shop in Côte d’Ivoire, Togo and Senegal.

“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,” said Jasper Graf von Hardenberg, CEO and Co-Founder of Daystar Power. “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.”

“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,” said Thomas Hougaard, Vice President, sub-Saharan Africa, IFU. “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.”

Nigeria represents the largest market for mini-grid in West Africa: small-grid capacity stands at 2.8MW as of 2019, with 52 of 59 mini-grid projects powered by solar energy. Private sector players command solar hybrid development in the majority of the region, garnering financial support from development finance institutions and receiving at least $374 million in the past decade from international donors for mini-grid development.

 “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,” said Charles-Henri Malecot, CEO, STOA. “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.”

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