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Patrice Motsepe-backed fund invests R50.5m in solar start-up

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Africa Rainbow Capital chairman Patrice Motsepe.
Africa Rainbow Capital chairman Patrice Motsepe.

Business magnate Patrice Motsepe-backed ARCH’s Africa Renewable Power Fund (ARPF) has invested $3 million (R50.5 million) in SA’s blockchain-based solar start-up Sun Exchange.

Sun Exchange claims to be the world’s first peer-to-peer solar leasing platform, leveraging financial innovation and the power of the crowd to make the environmental, social and economic benefits of solar power accessible and affordable for all.

Founded in 2018 as a partnership between Motsepe’s African Rainbow Capital and JCH & Partners, ARCH is an emerging markets investment advisory firm specialising in private equity opportunities with an initial focus on energy and logistics in developing economies, and is regulated in the UK by the Financial Conduct Authority.

ARPF is a Mauritian private equity fund advised by London-based ARCH Emerging Markets Partners. This investment marks the close of a $4 million (R67 million) Series-A funding round by Sun Exchange.

In February, ITWeb reported that ARCH Emerging Market Partners committed R249 million to develop and finance new commercial and industrial solar assets across Africa.

Solar spread

In a statement, Sun Exchange says it will use the funds to scale its solution and expand into new markets across Sub-Saharan Africa, enabling platform users to solar-power schools, clinics, farms, cell towers, water plants, businesses and other organisations across the continent.

The Sun Exchange online platform enables almost anyone, anywhere in the world, to buy remotely-located solar cells that power schools, businesses and other organisations in SA and other sunny emerging markets.

Solar cells can be purchased through online crowdsales for as little as $5 per cell and the owner then earns a rental income stream from the clean electricity the cells generate.

In turn, the off-taker organisations gain access to affordable and reliable solar power, reducing electricity costs and carbon emissions.

It also intends to use the investment to bolster marketing activities and substantially grow the platform’s global user base, as well as make significant software enhancements to extend its platform capabilities and features.

“Sun Exchange is positioned to emerge as an enabling force in the imminent global energy and economic transformation, with a first-of-a-kind platform that harnesses the power of a united global community to unlock the potential of distributed solar power in emerging markets,” says William Barry, managing director of ARCH.

“ARCH is thrilled to partner with Sun Exchange on this journey to expand the success the company has already seen in South Africa throughout ARPF’s target markets in Sub-Saharan Africa.”

“There has never been a more critical time to accelerate the Sun Exchange mission of connecting the world to the sun, as socio-economic and energy systems across the world are on the brink of being reset and redefined,” says Abe Cambridge, CEO and founder of Sun Exchange.

“This milestone unlocks the next phase of growth for Sun Exchange, which includes building our team, creating several new, sustainable, clean energy jobs, and providing our growing user base the opportunity to further diversify their solar cell portfolios across new regions and industries. With our shared passion for driving renewable energy proliferation and sustainability across Africa, ARCH is the perfect partner for Sun Exchange as we scale.”

Adam Draper, co-founder and managing director, Boost VC, and early Sun Exchange investor, says: “Amidst the unprecedented health and financial hardships currently impacting the entire world, we've seen an undeniable slowdown in venture capital deals. This successful raise speaks volumes of the ingenuity and resilience of the Sun Exchange business model.”

Sunny forecast

Sun Exchange says it has quickly become a recognised technology and solar finance innovation leader across Africa.

Last year, the company more than doubled the size of its community, now standing at more than 17 000 members from 162 countries.

Additionally, it says its project portfolio nearly tripled in size, with the company now facilitating solar power for 24 schools, businesses and organisations across SA.

Sun Exchange has received numerous awards and accolades, including being named one of Fast Company’s Most Innovative Companies in Africa.

ARCH ARPF aims to create long-term value for stakeholders while addressing the African market’s growing demand for bankable, de-risked, affordable electricity generation, while aiming to adhere to the highest ethical and environmental standards.

ARPF’s investment team has collectively spent decades originating and managing private sector power investments on the continent, including over $1 billion in closed utility-scale and off-grid sector investments.

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