Microgrids key to Bringing a Billion out of the Dark
Every night, more than a billion people live in the dark when the sun goes down. They experience a different world than that of people in developed countries. Their only source of light, where available, comes from kerosene – a fuel that is expensive, dirty and potentially dangerous. Consequently, their immediate environment is often filled with smoke and fire, thereby making it difficult to even see properly.
Ten years ago, alternatives to kerosene were hard to find. Today is a very different story. Technological advances have greatly reduced the price of LED lights and solar, not to mention precipitating global mobile coverage. Jake Kendall and Rodger Voorhies cite in a Foreign Affairs article, “according to the World Bank, mobile signals now cover some 90 percent of the world’s poor.” These changes have fed a mini-revolution where it is now possible to bring a billion people out of the dark.
Low-cost micro grid pioneer, Mera Gao Power (MGP), which provides lighting and cell phone charging services, recently closed a U.S. $500,000 debt investment deal with the Dutch-based ICCO investment fund. This is a welcome development for energy access companies, which desperately need funding to meet the increasing demand for lighting, cell phone charging and other energy services. Although encouraging, many more investments are needed.
As it turned out, 2014 was a very successful year, when energy access companies secured at least $64 million in investments, mostly equity, according to Greentech Media. This may have outpaced energy access investments in all previous years combined. MGP’s investment is particularly relevant because debt financing signals achievement of past success, as opposed to equity, which is riskier. More difficult to obtain, debt investment is essential to attracting commercial banks, —> Read More