Putting capital to work for last-mile energy distributors in Uganda

     

    June 27, 2019

     

    Aneri Pradhan, founder of ENVenture, explains how innovative financing can accelerate the adoption of clean energy in off-grid communities

     

    Selling an expensive technology to the poorest and most underserved people on the planet while doing it at a profit is the goal that Last Mile Distributors (LMDs) of green technology set themselves. Not only is this a herculean task, it’s also one under supported by investment.

     

    ENVenture was created to address the lack of support for LMDs in Uganda, where 85% of the population lacks access to electricity.

    Solar blog image

    Creating support systems for LMDs

    LMDs are mostly local Ugandan clean energy entrepreneurs; they have the networks, trust, and community reputation to bring new technologies, such as solar, to rural villages.

     

    What they don’t have access to is adequate financial services and networks to tap into for business knowledge and opportunity. Given that many clean energy suppliers are startups themselves, they also struggle to offer consignment to LMDs – unlike other consumer goods companies.
     

    Based on the above factors and guided by the Sustainable Development Goal number 7 (ensure access to affordable, reliable, sustainable and modern energy for all), ENVenture developed a model to identify and support LMDs that can sustainably deliver much-needed energy solutions in Uganda’s rural communities.
     

    We offer seed loans up to USD 2,000 and at interest rates between 10 and 16% per annum, far below the market rate of 25%.

    From seed loans to growth funds

    Over the last four years we’ve tested this model and realized some success. We’re now receiving requests from LMDs who would like to grow their businesses, invest in new technologies like the solar pumps, or invest in logistics. These requests require working capital.


    Thanks to Signify Foundation, we’re able to test our new ENVenture Growth Fund (EGF) to support our top LMDs to sell more clean energy profitably. The objectives include:

     

    1. Providing access to longer term patient working capital
    2. Reaching more customers in the communities they serve

     

    Our call for applications within our existing network of close to 100 LMDs has gone out and we expect final lending decisions in June.

     

    We look forward to accelerating the growth of LMDs in the Ugandan clean energy sector and at the same time, helping provide the most marginalized communities with access to clean and affordable energy.

    About the author:

    Aneri Pradhan

    Aneri Pradhan

    Founder of ENVenture, a social enterprise that accelerates rural clean energy enterprises in Uganda

    For further information, please contact:

    Signify Global Media Relations
    Neil Pattie
    Tel: + 31 6 15 08 48 17
    Email: neil.pattie@signify.com

    About Signify

     

    Signify (Euronext: LIGHT) is the world leader in lighting for professionals and consumers and lighting for the Internet of Things. Our Philips products, Interact connected lighting systems and data-enabled services, deliver business value and transform life in homes, buildings and public spaces. With 2018 sales of EUR 6.4 billion, we have approximately 29,000 employees and are present in over 70 countries. We unlock the extraordinary potential of light for brighter lives and a better world. We have been named Industry Leader in the Dow Jones Sustainability Index for two years in a row. News from Signify is located at the Newsroom, Twitter and LinkedIn. Information for investors can be found on the Investor Relations page.

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