Solar mini-grid company Husk gets a $100+ million debt and equity infusion for a major push in Africa and India
In large swathes of the developing world, people who had long awaited telephone lines never got them. Instead, when the cell phone came along, they could hopscotch right over landlines and get connected digitally. In a similar way, the company Husk Power Systems is helping jump directly to solar power. It’s a big market: In Nigeria alone there are some 90 million people who have no electricity. Worldwide, more than 940 million people do not have access to electricity.
This month, Husk announced that it had closed $43 million in Series D funding from new investors STOA Infra & Energy, the US International Development Finance Corporation (DFC) and Proparco, as well as existing investors Shell Ventures, Swedfund, and FMO. In addition, Husk leveraged the Series D equity to secure an additional $60 million in debt from several finance institutions, including the European Investment Bank (EIB), and the International Finance Corporation. (IFC). The funding paves the way for Husk to launch a major expansion plan of business in Africa and India — which it has dubbed a “sunshot.”
The company has about 200 mini-grids operating in India and Nigeria, connecting 200-300 households and businesses at each site. These privately operated grids provide infrastructure more robust than individual solar panels and more nimble than large utilities, which are chronically bad at connecting poorer rural communities. And, importantly, they provide clean renewable power to people who otherwise will likely turn to diesel-powered generators — which are deafeningly loud, dirty, and some 25–30 percent more expensive.
The new capital is expected to fund 1,400 new mini-grids, connecting some 300,000 customers — a third of them medium and small enterprises — and create some 2,500 jobs on the ground, while avoiding an estimated 350,000 tons of CO2 emissions by displacing diesel generation.
“The idea is to take what we’ve done in India and replicate it in Nigeria and from Nigeria move into other countries in sub-Saharan Africa like the Democratic Republic of the Congo potentially and do the same there,” says William Brent, chief marketing officer for Husk. “What we want to do is negotiate with governments to get concessions where they say ‘okay we’ll give you rights to develop 200 mini-grids’… So now we have proven we can access the capital markets, get affordable capital, get long-term capital that will allow it to scale and gives us the opportunity to have those conversations with government.”
The new capital will fund connections for some 300,000 customers — a third of them medium and small enterprises — while avoiding some 350,000 tons of CO2 emissions by displacing diesel generation.
The Colorado-based company started installing mini-grid operations in Sinha’s native India, where laws in some states paved the way to develop these systems with relative ease, and more recently in Nigeria, which has adopted similar legislation. Alongside these two key markets, Husk has its sights set on other sub-Saharan nations.
While Husk is getting up to speed in Africa, overcoming supply chain and other logistical challenges, its business in India is booming. The new capital will be used to grow its fleet of mini-grids there by about five times, to 1,000. “We have a business that can churn these things out… Like in India, you can do 16 mini-grids a month,” says Brent.
In a five-year initiative announced at the recent Africa Climate Summit, Husk committed to mobilizing $500 million “to rapidly scale the mini-grid industry in rural sub-Saharan Africa.” The goal: 1,000 mini-grids in Nigeria, 500 in the DRC, and 250 each in four additional countries. It was doing projects in Tanzania but met with political challenges so the company scaled back its presence in that market.
Read on for Husk’s origin story in an interview with CEO Manoj Sinha.
