France based Direct Energie SA has agreed to buy U.S. energy-technology start-up, Fenix International, to help fund the roll out of solar-power systems for Africans with no access to the electricity grid, reports from Bloomberg has said.
Within this plan, the report stated that Nigeria – a country with about 50 per cent of its 170 million people without electricity, is being evaluated as the next new market for the form alongside telecommunication firm, MTN.
Direct Energie SA produces gas and electricity. It generates and supplies thermal, hydroelectric, and renewable energy to individuals and enterprises, and is based in France.
According to the report, the French utility will provide capital and help raise debt to expand electricity services into at least 10 African countries over the next five years.
It quoted Fenix Chief Executive Officer, Lyndsay Handler to have said in a phone interview that Engie decided on the all-cash acquisition after initially considering a smaller investment.
Handler however declined to provide the terms of the deal, but said: “In order to achieve our goals we need hundreds of millions of dollars in equity and debt, and Engie is committed to provide what is needed.”
“This is not about a big acquisition, it’s about reaching the over 600 million Africans that lack access to electricity,” she added.
Fenix, it was stated was also evaluating whether to enter Nigeria alongside wireless carrier MTN Group Ltd as an early investor to help Fenix target consumers that use its mobile banking application, and who tend to be on lower incomes.
Handler however noted that takeover by Engie will not change the relationship with MTN.
The acquisition is the latest example of growing investor interest in off-grid solar power in Africa, after Enel Green Power SpA started to roll out Tesla Motors Inc.’s home-power kits in South Africa earlier this year.
Also, Fenix markets its system as a cheaper and cleaner alternative to the kerosene lamps, candles and wood fires used by millions of people living in fuel poverty on the continent.
Engie, on its part has been on an aggressive acquisition run in the past decade, investing in renewable energy options while selling coal-fired plants and exploration assets to shield it from commodity-price swings. It equally plans to spend 1.5 billion euros ($1.8 billion) on technologies including grid-scale battery storage, micro-grids and solar powered kits for Africa.
Its Chief Executive Officer Africa, Bruno Bensasson to Bloomberg by phone said that: “Africa is a key continent for us to invest in. There is an opportunity to make decent returns and profit. The telecommunications sector is probably the best example of this.”