Kouros, a clean energy investment company, and Powerhive Inc, an energy solutions and technology provider for emerging markets, announced the closing of a US$9.3m Series B round of funding.
Powerhive’s existing investors including Caterpillar Ventures James Sandler, Prelude Ventures, Tao Capital, and Total Energy Ventures together with Kouros and TO.org, joined Toyota Tsusho Corporation, the general trading company and member of Toyota Group who initiated this round.
The venture financing will support Powerhive’s growth by reaching 20,000 connections in Kenya where the company has operated rural microgrids since 2012. Powerhive became Kenya’s first privately licensed electricity utility leveraging its unique development and technology platform.
Powerhive leverages its proprietary technology platform to develop and operate portfolios of renewable microgrids that supply affordable, reliable and productive electricity to off-grid communities in emerging markets.
Powerhive’s long-term and scalable energy access solution drives rural economic development, reduces energy poverty and results in cleaner, the more resilient energy infrastructure in some of the world’s most vulnerable communities. Kouros will bring its expertise and energy transition investment platform to support Powerhive’s development and explore opportunities in microgrids and new energy solutions for Africa.
“The combination of Kouros’ expertise in energy transition and energy technology bricks with Powerhive’s energy services and development platform creates a powerful synergy to solve a great need in underserved regions of Kenya and other parts of Africa,” said Powerhive CEO Christopher Hornor.
“We’re excited to work with Kouros who shared our vision to build climate-friendly, sustainable and profitable businesses around energy and energy enabled services for the more than 640 million people that lack reliable access to energy and other basic services. This partnership is about supporting the building of sustainable, high quality and climate-friendly infrastructure in Africa built by Africans. Africa presents one of the only opportunities in the world to build cutting edge sustainable energy infrastructure from the ground up.”
“We are thrilled to support Powerhive in its development. Africa is one of the most exciting energy transition frontiers, where the encounter of usages and technology leads to powerful creativity that can inspire other regions of the world. With its platform, Powerhive has a unique and powerful tool to solve energy issues in Africa.” said Florent Bergeret, Kouros’ Head of Investments.
AltRaise acted as financial advisor to Powerhive on this transaction.
The Kouros Group is a major player in the fight against global warming, it works on the decarbonization of heavy transport and of power generation. Through its Scale-Up program, Kouros supports start-ups and SMEs of the energy sector in their industrialization.
Powerhive East Africa Ltd., is the first private company in Kenya’s history to receive a utility concession to generate, distribute, and sell electricity to the Kenyan public.
The concession, granted in 2015, allows Powerhive East Africa to scale up its operations in the region, beginning in Kisii and Nyamira counties in western Kenya, and to deliver electricity directly to hundreds of rural communities that are beyond the reach of the national grid.
Read also: Access to electricity in East Africa
Powerhive was granted the concession as a result of more than two years successfully operating microgrid pilot projects powered by 100% renewable energy in four villages in Kisii, Kenya. The pilot projects serve approximately 1,500 people and have played a critical role in creating new businesses, enabling the use of productive appliances, powering schools, and displacing kerosene and diesel, which emit toxic pollutants.
The Kenya Energy Regulatory Commission’s (ERC) decision to provide a concession to an off-grid utility company reflects the beginning of a global transformation in the energy sector. “The Powerhive permit was granted in recognition of the fact that grid expansion is not always the most economical choice to expand energy access; off-grid alternatives have a role to play,” wrote Dr. Frederick Nyang, director of economic regulation for the Kenya ERC, in a letter. “[Powerhive has demonstrated] that its microgrids are capable of operating in compliance with the prescribed standards for residential and commercial electricity service provision.”
“The government of Kenya recognizes that the fastest and least expensive approach to reach 100% electricity access is to allow private investment in distributed generation infrastructure,” said Powerhive East Africa’s Managing Director Zachary Ayieko. “Other national governments aggressively pursuing rural electrification targets can also benefit greatly by using Powerhive’s energy access solution.”
Historically, governments have pursued rural electrification almost exclusively through major public investments in grid expansion. Through its distributed energy delivery solutions, Powerhive aims to complement such government and utility efforts by focusing on areas that are too costly for grid extension. Powerhive East Africa’s concession and the resulting deployment of microgrid projects will set the stage for rapid global expansion and support Kenya’s goal of electrifying 100% of the population by 2030.