The U.S. Agency for International Development's U.S. Global Development Lab today announced $5 million in follow-on funding to Off Grid Electric. The award, funded through the Development Innovation Ventures (DIV) program, will allow Off Grid Electric to test its model at scale and catalyze additional investments to reach more than one million households.
In Tanzania, approximately 40 million people lack access to electricity. Off Grid Electric currently provides affordable, reliable light and energy services to 10,000 new households per month to families faced with an expensive grid, an unreliable grid, or no grid access at all. Off Grid Electric borrows from the telecom industry's business model: rather than purchasing costly solar systems, customers pre-pay for electrical services using "mobile money" and are able to access small-scale, radically efficient solar home systems with integrated appliances.
"Access to clean and reliable light and electricity can empower vulnerable communities to escape a cycle of extreme poverty," said Ann Mei Chang, Executive Director of the U.S. Global Development Lab. "Through our DIV program, we are proud to support Off Grid Electric's innovative approach to tackling this critical global challenge."
Off Grid Electric will use this latest DIV award to power more than 200,000 Tanzanian households. DIV works to source, test, and scale innovative development ideas that are evidence-based, cost-effective, and have the capability to deliver greater results. DIV's tiered-funding model, inspired by the venture capital experience, invests comparatively small amounts in relatively unproven concepts, and continues to support only those that can prove they work.
By demonstrating its ability to positively impact the lives of its customers and scale to reach hundreds of thousands of people, Off Grid Electric is the first DIV-supported program to receive three rounds of tiered funding, beginning in 2012. Off Grid Electric is a founding member of Power Africa's Beyond the Grid initiative, which focuses on unlocking growth for off-grid and small-scale energy solutions on the African continent.
To date, Off Grid Electric has used DIV grants to test and prove its operations in Tanzania. These tests have been catalytic in attracting private and public sector investment. In early 2015, Off Grid Electric partnered with the Government of Tanzania to bring access to affordable electricity to one million Tanzanian homes - five million people - by 2017. Building on its DIV grants, Off Grid Electric received $25 million in equity from SolarCity and DBL Investors, and an additional $40 million in debt from the Packard Foundation, Calvert Foundation, Cenairth, and other family offices.