Arnergy, a leader in off-grid solar energy in Nigeria, completes $18 million Series B financing to accelerate clean energy transformation and address grid crisis

Lagos, Nigeria, 2024-01-03 - Under the dual pressure of the continued deterioration of grid reliability and the fluctuation of international energy prices, Arnergy, a Nigerian off-grid solar energy solution provider, announced the completion of a $18 million Series B financing (including a $3 million first phase in 2023). This round was led by Nigerian private equity fund CardinalStone Capital Advisers (CCA), followed by Breakthrough Energy Ventures, British International Investment Company (BII) and other institutions. The funds will be used to expand the deployment of 12,000 systems and further consolidate its dominant position in the industrial and commercial solar field in West Africa.

In May 2023, the Nigerian government abolished its decades-long fuel subsidy policy, causing gasoline prices to soar 500% year-on-year and industrial and commercial electricity costs to increase by up to 300% (according to data from the Nigerian National Bureau of Statistics). This structural change has completely reversed the operating cost advantage of traditional fuel generators (which account for 65% of the backup power market), and significantly highlighted the economic benefits of off-grid solar energy.

Femi Adeyemo, founder and CEO of Arnergy, said: "In 2019, our value proposition is still based on power security, but the core of customer decision-making has shifted to full life cycle cost savings. For example, for a typical commercial and industrial user, a solar system can reduce its monthly energy expenditure from 200,000 naira (about 125 US dollars) to 96,000 naira (about 60 US dollars), with a five-year return on investment of more than 200%."

In 2024, the revenue share of Arnergy's "Z Lite" leasing products jumped from 30%-40% last year to 75%, marking the market's widespread recognition of the "zero down payment + 5-10 years installment" model. This model significantly lowers the barrier to clean energy adoption for small and medium-sized enterprises by converting capital expenditures into predictable operating expenses.

“Arnergy’s solution goes straight to the heart of Nigeria’s energy shortage,” said Shirley Somuah, partner at CCA. “Its combination of technological adaptability and financial innovation provides a model for climate technology investment in emerging markets.”

Benson Adenuga, Head of Nigeria at BII, added: “This project will drive sustainable energy access and directly support the United Nations Sustainable Development Goals 7 (affordable and clean energy) and 13 (climate action).”

Arnergy's case demonstrates the feasibility of clean energy transformation in emerging markets - by combining technological innovation with financial tools, policy challenges can be transformed into business opportunities. With the injection of this round of financing, the reconstruction of West Africa's energy landscape may be further accelerated.