Kampala- Solar Now, a lunar asset company, has received a €2 million (about Shs6.7 billion) equity investment to scale up renewable energy asset financing and solar gargets distribution in East Africa.
The equity fund is jointly contributed by Novastar Ventures and Acumen.
Novastar Ventures invests in enterprises that can generate large-scale benefits to low-income households and attractive returns to providers of capital while Acumen, invest capital in business models that deliver critical goods and services to the world’s poor.
The fund, according to the Solar Now executive officer, Mr Willem Nolens, will respond to solar technology demands in East Africa especially in rural areas that are off national grids.
“This investment will enable Solar Now to expand its branch network (from 45 to 60), further upgrade its management information system (MIS), and invest in more in research and development,” Mr Nolen said in a statement.
Currently, about 5,500 people are using Solar Now products but the company is targeting 10,000 by year 2030.
“The more we sell the more solar products, the more money we need. We are selling (solar products) to low-income customers, with a 20 per cent deposit payment. This means the company needs a steady and ready supply of capital,” Mr Nolen added.
Mr Duncan Onyango, the East Africa director at Acumen said: “We are excited about our investment in Solar Now, a company whose solar products clearly improve the lives of rural households in Uganda.”
Mr Onyango said, increased solar energy use in rural areas will cut energy expenses and spur small businesses like barber salons, cinemas and phone charging shops currently curtailed by lack of energy.
Solar Now investment in renewable energy comes after the European Union announced a Shs13.4 billion fund to facilitate 60,000 homesteads in the northern Uganda districts of Kitgum, Lamwo, Agago and Pader access energy-efficient cooking technologies.
The cooking technologies include improved cooking stoves that half charcoal usage a conventional stoves uses and solar systems for lighting.
If well implemented, the initiatives may reduce deforestation currently ravaging the country.
Solar energy seen as a solution to deforestation
According to the Uganda Power Sector Investment Plan 2011, the demand forecast for the base case total energy sales are projected to grow on average by 6.8 per cent annually from 2008 to 2030. This translates into 1800GWh in 2008 to 7679GWh in 2030 sales. The demand though supersedes the supply.
Uganda has lost 900,000 hectares of forest cover over the last ten years to deforestation as most people use charcoal for fuel. However, the government has planted less than 100,000 hectares and diversifying the sector with solar energy seems the right step in saving the environment.
Energy and Mineral Development minister Irene Muloni has also appealed to Ugandans to embrace renewal energy generated from solar and stop using high voltage bulbs to reduce on power consumption, cut homestead energy expenses and the environment from destructions.