Malawi-based off-grid solar distribution company, Yellow Malawi, has raised a $2 million investment from Acumen’s Hardest-to-Reach (H2R) initiative.
The Acumen H2R is a $250 million initiative aimed at activating clean energy markets in 16 underserved regions in Africa. The targeted countries are Benin, Burundi, Burkina Faso, Chad, the Democratic Republic of Congo, Guinea, Guinea Bissau, Lesotho, Malawi, Mozambique, Niger, Sierra Leone, Somalia, Togo, Uganda, and Zambia.
The funding will enable Yellow Malawi to expand its inventory of solar home systems. This coulf potentially mean unrestricted energy supply to 182,000 people, with 145,000 expected to gain access to electricity for the first time.
Interestingly, the first $1 million tranche will be disbursed in US dollars and repayments will be made in Malawian Kwacha. This approach, supported by the TCX EU Market Creation Facility subsidy, helps lower hedging costs and reduces foreign exchange risk, which is a common challenge for businesses in emerging markets. The second tranche will be entirely in US dollars, further stabilizing Yellow Malawi’s financial footing and supporting its sustainable growth in the energy sector.
Maya Khonje-Stewart, Yellow Malawi Co-Founder, believes that the partnership with Acumen enables the company to reach even more Malawians who deserve clean, affordable, and reliable energy access. As she explains it, “Acumen’s Hardest-to-Reach initiative understands the unique local context and has designed financing that not only meets our needs but also advances our mission to bring energy to those who need it most.
“The innovative structure addresses critical risks to our business and customers in Malawi and will allow us to reach more households with reliable and clean energy solutions.”
Yellow Malawi was founded in 2018 by Mike Heyink and Maya Stewart. The company has positioned itself as a solar home system and mobile phone distributor that provides energy access to off-grid and rural customers in Malawi. It has served over 530,000 customers with energy and 62,000 people with smartphones.
In June 2023, the company closed $14 million in Series B funding to launch digital and financial products. It intended to use the funds to expand its presence in its current markets, including Rwanda, Uganda, Zambia, and Madagascar, while preparing for additional debt funding rounds to accelerate its expansion.
Alongside Yellow Malawi, the H2R initiative has also invested $1.25 million in RDG Collective, an off-grid solar distributor in Zambia to fund its inventory purchase of solar home systems, enabling 66,000 people to receive energy access.
The investment will also allow for the purchase of solar generators, which will provide 180 small businesses with a reliable and clean source of energy while also generating income and supporting local economic development. H2R uses a variety of financial instruments to invest in off-grid solar companies that work to provide energy access to underserved homes.
