Sylvia Duruson
Yellow Malawi, a prominent off-grid solar distribution company, has secured a significant $2 million investment from Acumen’s Hardest-to-Reach (H2R) initiative. This financial boost is set to dramatically expand the company’s reach, providing energy access to 182,000 individuals, with 145,000 expected to receive electricity for the first time.
The investment structure is designed to mitigate financial risks and support sustainable growth. The first $1 million will be disbursed in US dollars with repayments in Malawian Kwacha, facilitated by a TCX EU Market Creation Facility subsidy to reduce hedging costs. The second tranche will be handled entirely in US dollars, effectively addressing foreign exchange risks.
Maya Khonje-Stewart, Co-Founder of Yellow Malawi, emphasized the importance of this partnership with Acumen. She highlighted how the H2R initiative’s understanding of local contexts has resulted in tailored financing that aligns with their mission to provide clean, affordable, and reliable energy access to Malawians.
The investment comes at a crucial time for Malawi, which ranks among the world’s least electrified nations. Only 11% of the population has access to electricity, with a stark urban-rural divide: 42% in cities compared to a mere 4% in villages.
Yellow Malawi, established in 2018 by Mike Heyink and Maya Stewart, has already made significant strides in addressing this energy deficit. The company has provided energy access to over 530,000 customers and smartphones to 62,000 individuals. Their focus on off-grid and rural customers has positioned them as a key player in Malawi’s energy landscape.
The company’s growth trajectory is impressive. In June 2023, Yellow Malawi secured $14 million in Series B funding, earmarked for launching digital and financial products and expanding their presence in existing markets including Rwanda, Uganda, Zambia, and Madagascar.
Acumen’s H2R initiative, which provided this latest investment, is part of a broader $250 million program aimed at stimulating clean energy markets across 16 underserved regions in Africa. The initiative targets countries such as Benin, Burundi, Chad, Democratic Republic of Congo, and others, using various financial instruments to invest in off-grid solar companies.
The impact of H2R extends beyond Yellow Malawi. Recently, it invested $1.25 million in RDG Collective, an off-grid solar distributor in Zambia. This funding will enable energy access for 66,000 people and support 180 small businesses with reliable, clean energy sources, fostering local economic development.
Yellow Malawi’s success story is a beacon of hope for sustainable energy solutions in Africa. By combining innovative financing with a deep understanding of local needs, the company is not just providing electricity but also empowering communities and driving economic growth.
As Yellow Malawi continues to expand its reach, the implications for Malawi’s development are profound. Increased access to reliable energy can transform education, healthcare, and economic opportunities in rural areas. This investment represents more than just financial support; it’s a catalyst for social change and sustainable development in one of Africa’s least electrified nations.
