April 15th, 2021 — Despite significant progress towards achieving universal electricity access, an estimated 789 million people across the world still live without power. Roughly 600 million of this population lives in Sub-Saharan Africa, a region already struggling to keep up with rapidly rising electricity demand due to population growth and economic development.

Achieving universal energy access in Sub-Saharan Africa will require $27B in annual investment every year through 2030, according to IEA estimates. Today, annual investment is about half of this necessary figure, hindered by perceived investment risk and limited understanding of household ability to pay.

Nithio’s financing platform uses unparalleled consumer credit intelligence to unlock off-grid energy access in Africa. By providing AI-driven insights and directing capital to scalable distributed energy projects, Nithio is providing a crucial tool for businesses, investors, and governments to scale energy financing on the continent.

The Capital Deployment Bottleneck

As many of the leading global asset managers, banks, and corporations make financial commitments to combat the climate crisis, there is an untapped opportunity to deploy capital in developing countries where both financial and social impact can be maximized. Expanding energy access in Africa is critical to spurring economic growth and providing improvements across health, education, agriculture, and communication. In particular, off-grid solar solutions offer a critical path to both carbon-free electrification and local economic development, including providing access to income-generating appliances such as irrigation pumps and grain processing mills. 

High levels of perceived investor risk—driven by limited experience on the continent and a widespread lack of recorded consumer credit data—have created a major bottleneck to financing off-grid energy solutions, which are expected to account for over half of required connections on the path to achieving universal energy access. Without the ability to accurately assess individuals’ creditworthiness, it remains difficult for pay-as-you-go (PAYGO) solar operators to demonstrate the economic viability of their business and attract development capital.

Without adequate repayment data and basic information on African households, providing highly accurate credit risk analytics has not been possible. Properly evaluating credit risk requires granular consumer data coupled with the financial expertise to not only deeply understand local consumers, but also to match the right type of capital for each customer. As the industry scales, it is essential to adopt a comprehensive solution that unlocks capital and manages PAYGO users’ credit risk.

How Nithio is Unlocking Capital for Off-Grid Energy Access

Nithio invests private and institutional capital in vetted and risk-adjusted energy access opportunities through their data-driven financing platform, Nithio Financial Intermediary (FI). Using data to create new standards for risk assessment in the sector, Nithio expands the universe of potential investors for energy access in Africa as well as enables existing players to scale their investments.

Nithio’s financing platform is driven by the company’s cutting-edge Risk Analytics Engine, which improves consumer credit transparency and enables off-grid solar operators and investors to make informed financial decisions. By combining hyper-localized customer datasets with AI and proprietary geospatial analysis, Nithio helps investors and PAYGO operators better understand their portfolios’ financial potential and precisely identify areas for investment or development that best fit their investment risk profile.

Initially, Nithio is focused on clean energy access in Africa, but the firm’s credit scoring analytics capabilities can easily expand into agriculture and micro-financing use cases across the continent in the future.

Powerhouse Ventures Invests in Nithio

Powerhouse Ventures participated in Nithio’s $7.1M Series A round, led by TPG’s The Rise Fund in partnership with Kupanda Capital, and joined by Emerson Collective. This round of equity financing complements the recent close of an initial $23M in Nithio FI from ElectriFi, the U.S. International Development Finance Corporation (DFC), and others.

Nithio is led by Co-Founder & CEO Hela Cheikhrouhou (former Minister of Energy, Mining and Renewables of Tunisia), Co-Founder & COO Kate Steel (former Director of the Energy Office at USAID’s Power Africa and previously led renewable energy and energy access investments at Google), and Co-Founders & Board Members Queen Chinyere Quinn and Bobby J. Pittman of Kupanda Capital. We look forward to working with Nithio's experienced team to unlock and deploy financing for off-grid energy access.

Special thanks to Nick Curran, Ry Storey-Fisher, and Marie Thompson

To read more about Powerhouse Ventures’ other publicly-announced investments, visit our Insights page.