O&G major Shell has invested in African renewables and microgrid provider PowerGen Renewable Energy as it looks to upscale its energy access business.
Shell is amongst a range of companies to participate in a Series B investment round held by PowerGen, including the likes of Japanese bank Sumitomo Corporation and Renewable Energy Performance Platform.
PowerGen was founded in 2011 and has connected more than 70,000 customers to renewables-led microgrid to date. Most recently it acquired Rafiki Power, the off-grid company nurtured by E.On until this August.
A host of utilities have been engaged in the space, with Engie having acquired both off-grid specialist Fenix International and Mobisol. One of the sector’s leaders, BBOXX, also recently closed a funding round led by Mitsubishi which saw it raise US$50 million to fund an expansion.
PowerGen is to use the finance to strengthen its position in its core markets including Kenya, Tanzania, Sierra Leone and Nigeria, while also enabling it to expand into new markets as the demand for renewable power grows.
Shell’s participation is borne out of its New Energies division, which has been prolific in its investment in and acquisition of renewables and alternative energy companies of late. Brian Davis, VP for energy solutions at Shell, said the company was happy to be supporting the “next chapter in PowerGen’s exciting journey”.
“We see that Powergen’s local experience, capabilities and growth to date make it well positioned to serve the expanding African decentralised power market. The firm is a key part of our growing energy access business as we move towards Shell’s ambition to provide a reliable electricity supply by 2030 to 100 million people in the developing world,” he added.
With more than 600 million lacking access to electricity in Africa, the majority of which live in rural areas, microgrids have emerged as a particularly effective way in bringing clean power to African communities.
Aaron Cheng, president at PowerGen, said bringing in institutions with “significant expertise in and commitment to the African energy access industry” would bolster the firm’s knowledge and experience.
“We are excited to work with them to build the energy system of the future in Africa, helping to bring electricity to the millions of people without,” Cheng said.