Palladium Impact Investments has made its first direct investment
Based in West Africa, PEG Africa are a leading off-grid solar company that provides energy and access to financing in remote areas.
PEG will use Palladium’s financing to help accelerate its growth in Ghana and Cote d’Ivoire, reaching 500,000 more customers and growing its core operations to provide affordable energy for those who need it.
Tracey Austin, Global Head Palladium Impact Investments, is clear that this investment can generate economic and social value: “Palladium Impact Investments is proud to be a part of this syndicate, a pioneering transaction bespoke to the region and the industry. We believe that this deal will help to facilitate more renewable energy investments like it in West Africa.”
Over 150 million people in West Africa do not have access to electricity. Many have to travel miles to use mains electricity points and spend up to 30% of their incomes on poor quality, inconsistent, and polluting fuels like kerosene, candles, or batteries. PEG sells solar home systems that include power lighting, phone charging, and radios as a solution for these off-grid households.
Many of PEG’s customers are in poor, rural areas and, with no assets or credit history, are often considered too risky for banks or microfinance programmes. Typically, they could not afford PEG’s solar home systems, so PEG created an innovative business model that provides solar home systems on credit, allowing customers to pay as they go in smaller increments. PEG focus on helping off-grid households gain ownership of productive assets that they want and need. In the context of solar home systems, every payment is a payment towards outright ownership. This model is cheaper for customers, allows them to grow their credit, and provides a pathway to the ownership of an asset to provide further financial security.
For Palladium Impact Investments, the potential for scale is an essential feature of the transaction. “Based on the adapted technology underpinning the solar home systems, the combination of co-investors/partners and the active tracking of impact measurement, PEG Africa’s expansion is expected to deliver positive impact for the vast population in West Africa currently unable to access electricity. (Tracey Austin, Global Head Palladium Impact Investments).”
PEG’s model is profitable, has positive environmental and social impact, and is scalable, making it an exemplar investee for our vision of Positive Impact. Our partnership with the investee and other co-investors strongly supports Palladium Impact Investment’s plans to invest in more growing businesses in West Africa – particularly Ghana, Nigeria, and Cote d’Ivoire.