Husk Power Systems (“Husk”) has closed $43 million in Series D funding, the largest-ever equity raise in the minigrid industry.

The funding cements Husk’s position as the leader in electrifying communities in rural Sub-Saharan Africa and South Asia with an AI-enabled platform of renewable energy services.

The equity funding includes new investors STOA Infra & Energy, the US International Development Finance Corporation (DFC) and Proparco, as well as existing investors Shell Ventures, Swedfund and FMO.

In addition, Husk has leveraged the Series D equity to secure an additional $60 million in debt from several finance institutions, including the European Investment Bank (EIB), and the International Finance Corporation. (IFC).

Since raising $25 million in equity funding in 2018, Husk has grown its fleet 20-fold to more than 200 solar hybrid minigrids across two continents, impacted 500,000 people, served more than 10,000 micro, small and medium enterprises (MSMEs), avoided 25,000 tonnes of CO2, achieved a CAGR of 60% despite two years of Covid, and maintained exceptional customer loyalty with a retention rate of more than 90%.

It also became the first minigrid company to become EBITDA positive in Q4 2022, and has built a team of more than 500 employees.

Over the next 5 years, the new funding will be used to grow Husk’s fleet 8-times by adding more than 1,400 new minigrids with a projected 300,000 new connections (one-third of them MSMEs), while avoiding 350,000 tonnes of CO2.

Husk will also continue to build a world-class team and add 2,500 more employees, while expanding into new markets in Africa and Asia.

The Africa Sunshot initiative, which Husk announced at the Africa Climate Summit in September 2023, will mobilize at least $500 million for Husk to scale to 2,500 minigrids in 6 countries within 5 years. Two-thirds of the newly announced financing will go toward Sub-Saharan Africa, marking an important first step to achieving the Africa Sunshot goals.

Commented Manoj Sinha, Husk Co-Founder and CEO:

“We have successfully created and scaled a rural energy platform that is life-changing for our communities from day one. We’re excited to put this new equity and debt to work to supercharge Husk’s growth and unlock the full economic and social potential for a generation of rural Africans and Asians, especially women and youth, that would otherwise be left behind.”

Referring to the financing, Jean-Pierre Barral, Deputy CEO, STOA Infra & Energy, said:

“STOA is impressed by the track record and performance of Husk, which has resulted in a competitive energy solution that is affordable, reliable and clean. STOA is excited to lead this equity investment in Husk and support the growth of the minigrid industry, which is key to achieving universal energy access and a low carbon energy transition.”

Mateo Goldman, Acting Head, Office of Equity and Investment Funds, DFC, stated:

“This is an important transaction that will strengthen energy security across Africa and Asia, which will bolster investment, increase economic opportunity, and improve livelihoods. This project will help meet the growing demand for clean, affordable, and reliable energy vital to creating stability and prosperity.”

Added Amit Narayan, ex-CEO, AutoGrid Systems & Husk Board Member:

“Husk Power has shown how AI can be a catalyst for providing planetary-scale impact and sustainable growth. Husk’s intelligent platform allows automated management of rural minigrids operating under extreme environmental and cost constraints, and it has achieved what many felt was impossible by providing access to 24×7 reliable power to some of the most underserved communities in a profitable manner. I look forward to the next phase of this incredible story.

Mark Gainsborough, Chairman, Low Carbon Advisors & Husk Board Member commented:

“Husk Power represents a climate win-win-win. It is delivering low-carbon economic growth, it is helping climate-vulnerable communities adapt to increasing environmental shocks, and it is transitioning rural communities dominated by diesel generation to more affordable and cleaner solar power. It is extremely exciting that they now have infrastructure-level capital to scale this unique climate solution.”

Concluded Brad Mattson, Husk Board Chairman:

“The minigrid industry needs at least a 10X increase in its rate of deployment to achieve the World Bank’s target of 200,000 minigrids by 2030. Husk is now positioned to lead that growth and help to create an industrial revolution in rural Africa and Asia.”

Husk pioneered the community minigrid industry in 2008, creating a new category of decentralized renewable energy infrastructure that provides first-time access to reliable, affordable, clean and modern power.

It has since evolved its business model, expanding beyond energy access to include the energy transition from fossil fuels to renewables.

As a result, Husk has matured from a pure-play minigrid operator to become an integrated platform that unlocks the “Power of Rural” in Africa and Asia.

Besides electricity sales, this includes sales and financing of energy efficient appliances, turnkey commercial and industrial (C&I) rooftop solar and a range of low-carbon and climate-resilient energy services, including e-mobility, agro-processing and cold storage.

This innovative ecosystem approach is progressively becoming more intelligent and automated, powered by AI and IoT.

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Aiming to accelerate public-private partnerships (PPP) that can achieve universal electrification in Least Developed Countries (LDCs), Husk Power Systems today issued an invitation to governments in Sub-Saharan Africa to partner in scaling the deployment of renewable energy minigrids in off-grid, weak-grid and under-the-grid communities.

Announced during the Private Sector Forum at the 5th United Nations Conference on the Least Developed Countries (LDC5), Husk said it welcomed expressions of interest from national and sub-national governments.

Elements of the company’s proposed PPP:

• Husk to finance the building of 200 minigrids in one or more LDCs in Sub-Saharan Africa;
• Husk to own and operate the minigrids for the lifetime of the projects;
• Husk to select the 200 communities based on its business model and to have the ability to charge cost-reflective tariffs that are affordable for customers;
• Interested governments to provide a 20- to 25-year concession to Husk;
• If required, interested governments and/or their funding partners to provide viability gap support for the initial phase of minigrid operations.

The need to accelerate electrification in LDCs is enormous. Lack of electricity impacts hundreds of millions of lives and countless small businesses.

In the 33 LDCs in Africa, the electrification rate is only 36%. For rural areas in LDCs, the number of newly connected customers each year needs to increase from 13.7 million to 41 million to achieve Sustainable Development Goal (SDG7) – access to modern, reliable, clean and affordable electricity for all by 2030.

Under its proposed PPP, in one country Husk estimates that 200 of its minigrids would benefit up to 1 million people and 10,000 small businesses, power hundreds of schools and health clinics and avoid 15,000 tons of CO2 annually by displacing diesel and gasoline generation.

In 2022, Husk became the first and only minigrid company to sign a UN Energy Compact in support of SDG7. In its UN Energy Compact, Husk pledged to build up to 5,000 minigrids that would benefit more than 11 million people.

Husk currently has more than 200 minigrids in operation in India, Nigeria and Tanzania and expects to double that number to 400 within the next 12 months.

Referring to today’s announcement, Manoj Sinha, Husk Power’s Co–Founder and CEO, said: “As LDC governments in Sub-Saharan Africa look to roll out integrated energy systems that will be both fiscally sound and climate resilient, Husk is ready for action. We have the scale and  a proven business model, and it’s now time for SDG7-focused public-private partnerships to move from pilot phase to full-fledged market interventions that can achieve radical scale.”

The company has also developed a pipeline of nearly 100 additional microgrids for future development.

Since entering Nigeria in 2020, Husk now accounts for about 15% of the microgrids commissioned under the World Bank-funded Nigeria Electrification Project (NEP), a unit under the Rural Electrification Agency (REA) that is working to scale private sector solar microgrids. Husk is on track to complete about 20 sites in Nigeria by the start of 2023.

At full capacity the 12 microgrids owned and operated by Husk, all located in Nasarawa state, are expected to benefit more than 50,000 people.

Husk is seeing 50% of diesel generators in its communities taken offline within the first year of a microgrid’s operations, amounting to hundreds of displaced generators. Customers are registering at least 30% reduction in monthly energy costs by switching from diesel to solar.

Husk’s first batch of six microgrids were launched in November 2021,. Those sites are experiencing high demand from both businesses and households. For example, average capacity utilization for Husk’s microgrids – a key measure of commercial viability – is already more than 50%, well above the industry average.

Husk’s average monthly revenue per customer is also 2-3 times higher than the industry benchmark, based on data from the Africa Minigrid Developers Association (AMDA) published in 2022.

In addition to providing electricity, Husk has introduced appliance sales to the communities served by its microgrids, for both household and productive uses (such as health centers, water purification and agro-processing).

“Doubling our net-zero microgrid portfolio in less than a year is testament to Husk’s ability to play an important role in Nigeria’s Energy Transition Plan and its goal of providing energy for all within this decade,” said Olu Aruike, Country Director of Husk Nigeria. “With continued support from our host communities, governments at all levels and other partners, we will create a rural energy platform to help off grid and weak grid communities achieve their full economic potential.”

Earlier this year, Husk launched its Nigeria Sunshot initiative, with a target of building at least 500 sites by 2026 benefiting more than 2 million people and displacing 25,000 diesel generators.

According to recent Nigerian government data, solar microgrids represent the least-cost technology for 8.9 million of the 19.8 million additional connections needed in the country to achieve universal electrification by 2030.

Under its Nigeria Sunshot Initiative, by 2026 Husk will be able to provide about 5% of those microgrid connections, and impact 2 million people, with the potential for much greater impact by the end of the decade.

Besides the IREDA loan, Husk expects to raise an additional $18 million in debt in 2022 to fuel accelerated project deployment, while also kicking off fundraising for a Series D equity round in Q1.

The company has built a robust project pipeline in both India and Africa, and expects to have about 1,300 grids in operation by 2025 across multiple markets.

The new India debt, part of a line of credit provided by German development bank KfW to IREDA to assist developers in scaling off-grid energy projects, will be used to finance 140 microgrids in the states of Uttar Pradesh and Bihar, where Husk Power has been serving rural communities since 2008, including thousands of micro, small and medium-sized enterprises (MSMEs).

The IREDA loan to Husk represents the biggest debt financing for rural microgrids in India to date.

IREDA is a state-owned non-banking financial institution (NBFI) under the administrative control of India’s Ministry of New and Renewable Energy (MNRE). It promotes, develops and extends financial assistance to renewable energy projects.

“The IREDA financing demonstrates the Government of India’s vision in making microgrids an

integral part of its net-zero goal put forward at COP26,” said Manoj Sinha, Husk CEO and Co-Founder. ”This is a huge validation of Husk Power’s leadership in being the first company to achieve commercial scale. The IREDA funding will give Husk a much-needed boost to achieve our target of expanding our microgrid fleet 10x by 2025.”

Added Husk CFO Naveen Garg: “We’re extremely grateful to IREDA, KfW and technical consultants PwC for the close collaboration that made this financing possible.”

Husk Power Systems recently signed an Energy Compact with the United Nations, committing to build 5,000 microgrids with 1 million connections by 2030 in India, Nigeria and other countries in South Asia and Sub-Saharan Africa.

Energy Compacts are voluntary commitments to Sustainable Development Goal 7 (SDG7) – access to affordable, reliable, clean and modern energy – with specific, trackable actions to advance progress on the energy transition and net-zero emissions.

SEforALL spearheaded the process as a key outcome to the UN High-level Dialogue on Energy and COP26 in 2021.

Key points:

Specifically, Husk Power Systems’ compact put forward seven goals for the year 2030:

• Building at least 5,000 minigrids
• Establishing 1 million connections
• Powering 500,000 micro, small and medium-sized enterprises (MSMEs)
• Benefitting 11 million people
• Installing 500MW of rural commercial & industrial (C&I) solar 
• Selling 5 million energy efficient appliances
• Avoiding 7Mt of CO2

According to the World Bank, minigrids have the potential to provide power to nearly 500 million people.

To do that, over 200,000 minigrids and $200 billion would be needed. However, today there are only 19,000 minigrids globally and the industry has only attracted $5 billion.

“The minigrid industry is starting to scale and is demonstrating significant socio-economic impact, but we still have a long way to go to reach our full potential,” said Husk Power Systems CEO and Co-founder Manoj Sinha. “Our compact with the UN is intended to put forward a more ambitious vision not only for Husk, but the entire minigrid industry and by doing so, to mobilize a much higher level of climate finance and more supportive government regulation and policy.”

Added Kanika Chawla, UN Energy and SEforALL programme manager: “We welcome the Energy Compact commitments made by Husk Power and appreciate their leadership. It showcases the business opportunity presented by the global energy transition, and how private enterprises can drive accelerated action on ending energy poverty, expand renewable energy solutions for consumptive and productive load, and improve the adoption of energy efficiency solutions by end consumers.”