PowerGen receives $15m in equity funding

February 03, 2025

From the newsletter

Kenyan-based renewable energy company PowerGen Renewable Energy (PowerGen) has received $15m in funding from a Denmark-based, Investment Fund for Developing Countries (IFU). PowerGen aims to develop a 120 MW portfolio of commercial and industrial (C&I) and mini-grid renewable power projects across Africa.

  • The funding is a joint investment involving the Private Infrastructure Development Group (PIDG), the EU-funded EDFI ElectriFi, and the African Development Bank’s Sustainable Energy Fund for Africa (SEFA).

  • It is expected to provide energy access for over 68,000 households and reduce power costs for 7,000 businesses in Nigeria, the Democratic Republic of the Congo (DRC), and Sierra Leone, with the potential to charter other African markets.

More details

  • Over 570 million people in Sub-Saharan Africa lack access to electricity, accounting for 80% of the global electricity access gap. Central and West Africa are the most affected regions, with fewer than half of their populations having access to electricity.

  • With over 13 years of operational expertise, PowerGen is a pioneer in developing solar mini-grids and decentralised energy solutions, with projects in 12 countries, including Kenya, Tanzania, and Nigeria.

  • In 2024, PowerGen was among the leading firms allocated two sites by the Kano Electricity Distribution Company PLC (KEDCO), where it integrated off-grid renewable energy with the main grid to drive a seamless energy transition, meet suppressed demand, and foster economic growth. 

  • The company has also partnered with the Abuja Electricity Distribution Company (AEDC) and the Rural Electrification Agency to commission Nigeria’s first Interconnected Solar Hybrid Mini-Grid in Nasarawa State. This project provides reliable electricity to over 2,000 households,141 commercial users, 18 productive users, and 45 public users, significantly improving the socio-economic conditions of the community.

  • This expansion aims to position PowerGen as an industry leader in renewable energy by accelerating electrification through collaborations with local developers and EPC partners. The initial phase of funding was completed in January 2025, setting the stage for further equity and debt financing later this year.

  • The project will add to PowerGen’s portfolio of renewable mini-/metro-grids and commercial and industrial (C&I) power solutions, including battery energy storage systems. It is expected to drive economic activity, boost productivity, and create significant employment opportunities.

Our take

  • Equity financing (and the lack thereof) is a significant barrier to scaling renewable energy projects in Africa. The IFC’s commitment is timely and essential in addressing Africa’s power access gap, providing much-needed capital to bridge the infrastructure deficit and drive sustainable development.

  • Strategic partnerships are essential for driving Africa’s renewable energy growth. By connecting global investment with local knowledge, these collaborations could turn the continent into a $1 trillion green economy by 2040, providing power to homes and industries while promoting sustainability.

  • The market opportunity in Africa is huge, but energy companies lack access to capital to scale up operations. Financing will be key for rapid progress. Banks and development finance institutions need to find the best way to finance energy companies. One effective approach for DFIs is to create currency hedging solutions to cushion private sector investments from currency volatility.