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.”

DEG allocated the funds from its Up-Scaling Program, which is co-financed by the Federal Ministry for Economic Cooperation and Development.

The 5-year loan in the amount of US $749,000 follows Husk successfully closing debt totalling US $10.3 million from EDFI-ElectriFI and IREDA in 2022 to build over 200 microgrids in India.

The DEG financing is the first debt raised by Husk for its business in Nigeria, where the company currently has 12 operational microgrids, and a target of building 500 by 2026.

The 8 microgrids in Nigeria will connect more than 500 residential and commercial customers, reduce the number of diesel generators in use by 400, while creating about 40 new direct local jobs.

Referring to the financing, Petra Kotte, Head of Banking and German Business Division, DEG, said: “Husk is exactly the type of company we’re looking for at the Up-Scaling Program, which supports innovative greentech business models in emerging markets that demonstrate high development impact and a significant reduction of carbon emissions.”

“Access to affordable debt is critical to scaling solar microgrids in Nigeria, home to 90 million people living without access to electricity,” said Manoj Sinha, Co-Founder and CEO, Husk. “This financing provides Husk with a solid foundation for unlocking additional debt, including local currency debt, this year and beyond.”

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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.

The initiative consists of a three-part strategy:

1) demonstrating accelerated microgrid deployment at scale;

2) improving livelihoods by providing financing for the purchase of energy efficiency appliances (for both households and MSMEs) and

3) catalyzing greater local socio-economic development by rolling out productive use activities, including agri-processing and cold storage. 

“Husk Power will do its utmost to support federal, state and local governments to deliver on Nigeria’s goal of universal electrification by 2030,” said Olu Aruike, Country Manager of Husk Nigeria. “With more than 90 million Nigerians still living without access to energy, the Nigeria Sunshot is a real-world demonstration that the microgrid industry is ready to scale, and drive rural economic growth with a net-zero, resilient solution.”  

Key goals of the Nigeria Sunshot include: 

• Building at least 500 microgrids by 2026
• Establishing 400,000 connections that benefit over 2 million people
• Taking at least 25,000 diesel and gasoline generators offline
• Providing affordable energy to 8,000 women-led business customers
• Electrifying 700 public health clinics and 200 private hospitals, and 100 public schools

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.

Under the Sunshot Initiative, Husk will be able to provide about 5% of those connections, and impact 1% of the total Nigerian population.

In late 2021, Husk became the first company to commission multiple microgrids at once in Nigeria, clearly demonstrating the ability to scale. Husk expects to end 2022 with more than 20 microgrids in operation.

Besides its presence in Nigeria and Tanzania, Husk is also in discussions to enter multiple new markets in Sub-Saharan Africa.

By scaling in Nigeria, Africa’s largest economy, Husk will be able to expand and achieve even greater impact. Overall, Husk committed in a 2022 UN Energy Compact to build 5,000 microgrids by 2030.

Founded in 2008, Husk Power Systems is the leading net-zero energy services company operating across Asia and Africa. Its smart and sustainable solutions, centered around community solar microgrids, accelerate access to clean, modern and affordable electricity and catalyze socio-economic development.

Husk’s focus on the customer meets the growing aspirations of businesses and households, while its grid-integratable solution supports national electrification plans.

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.