Ignite Power secures $15m from AFRIGREEN to drive solar energy transformation in West Africa
Onome Amuge
Ignite Power, a leading renewable energy company in Africa, has secured a $15 million senior debt financing from Afrigreen Debt Impact Fund (AFRIGREEN), a top investor in the continent’s renewable energy sector, for its subsidiary Westa Solar.
This financing will support Westa Solar’s ongoing commercial and industrial (C&I) solar energy projects in Africa, advancing the company’s efforts to expand renewable energy access across the continent. The financing obtained from AFRIGREEN will also fuel Ignite Power’s expansion plans, enabling the company to tap into lucrative yet untapped markets in West Africa.
Notably, the $15 million senior debt financing has been structured in two phases, with an initial tranche of $4 million to be disbursed immediately, followed by a further $11 million contingent upon successful deployment of the first phase and confirmation of mutual intent by the parties involved. This investment strategy ensures that the funds are utilised effectively and efficiently, with a focus on driving Ignite Power’s mission of promoting solar energy adoption in the region.
Ignite Power’s innovative financing model, which incorporates Power Purchase Agreements (PPAs) and leasing options, enables businesses in the region to adopt solar energy solutions without the need for substantial upfront capital investments.
According to reports, West Africa’s businesses are increasingly seeking alternative energy sources to address the challenges of unreliable grid electricity and soaring diesel costs.
In Nigeria’s market, where access to affordable financing can be challenging, Ignite Power’s innovative hedging structure, developed in collaboration with the International Finance Corporation (IFC), represents a significant advancement. The agreement incorporates a unique hedging instrument that allows Ignite Power to receive funds in USD while repaying the loan based on the Naira-equivalent value at the time of repayment.
In a country like Nigeria, where exchange rate volatility is a significant concern, the inclusion of a hedging instrument within Ignite Power’s financing agreement with IFC is particularly noteworthy. This mechanism is designed to mitigate the risks associated with currency fluctuations, enabling Ignite Power to hedge against potential losses and maintain a stable financial environment for project deployment and long-term operations.
Ignite Power’s tailored financing options present a compelling alternative, enabling businesses to adopt solar energy solutions without incurring significant upfront capital investments. By removing the traditional financial barriers to solar adoption, Ignite Power is unlocking growth opportunities in the commercial and industrial sector, driving the transition to a more sustainable energy ecosystem.
The successful conclusion of this financing agreement puts Ignite Power in a position of strength for future growth. With this investment, the company’s C&I subsidiary, Westa, is well-positioned to expand its operations in West Africa, building on the 3 MW of solar energy already deployed in the region.
Yariv Cohen, Ignite Power CEO, commented on the importance of the investment, stating that the partnership with Afrigreen represents a landmark opportunity not only for our company but also for the entire solar sector across West Africa.
“The demand for clean, reliable, and affordable energy solutions has never been greater, particularly in Nigeria. With this financing, we can offer businesses innovative financing solutions, eliminating upfront capital requirements and making solar energy accessible to a wider market. This is an unprecedented opportunity to establish the next generation of the energy sector in West Africa—distributed, 100% sustainable, and clean,” Cohen remarked.
On his part,Vincenzo Capogna, Westa Solar’s managing director, observed that the potential for solar energy in the commercial and industrial sectors in Nigeria is immense.
“Businesses are struggling with unreliable grid power and rising fuel costs, and we believe that Westa Solar’s solutions will provide them with a more reliable, cost-effective, and environmentally friendly alternative. This investment enables us to move faster and bring more projects online, helping to transform the energy landscape in the region,” Capogna added.
Alexandre Gilles, Afrigreen fund advisor’s managing director, also expressed excitement about the collaboration.
“We are proud to support Ignite Power, a visionary and highly capable player in the C&I solar market. The company’s track record of delivering high-quality projects, combined with the immense market potential in Nigeria and West Africa, makes this partnership an exciting opportunity for us. Our investment is aligned with Afrigreen’s mission to support impactful renewable energy projects, and we look forward to seeing the positive impact that this financing will have on the region’s energy landscape,” he said.
Gilles also commented on the innovative hedging instrument developed with the IFC for the deal, emphasising the significance of creative financing solutions
According to him, innovative financing mechanisms like the one developed for this transaction are crucial for supporting impactful operations in emerging markets.