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The EU-funded Electrification Financing Initiative (EDFI ElectriFI) has invested a $2 million convertible note in the Lusaka-based solar home systems provider RDG Collective. The clean energy company distributes solar kits and productive-use appliances for households in rural Zambia.
EDFI ElectriFI provided the convertible (equity) loan to RDC under its dedicated Zambia window which is funded by the 11th European Fund for Zambia. The window is designed in close collaboration with the Zambian authorities, the EU delegation, and the Common Market for Eastern and Southern Africa (COMESA).
Quentin De Hoe, Senior Investment Officer at EDFI Management Company, said, RDG has already built a strong business model in Zambia. EDFI is confident that the funding will perfectly complement the grant that RDG received from the Beyond the Grid Fund for Africa (BGFA), as well as support its continued expansion in the country.
According to the World Bank, Zambia has only a 44.5% of electricity access rate, as of 2020. The EDFI’s investment is in line with RDG’s commitment to bring renewable, affordable, and reliable electricity to more than 250,000 people in the country.
RDG Collective has based its business strategy on the pay-as-you-go model which is widely popular in the solar home systems segment in Africa. The financing will help the company to distribute more than 50,000 new solar home systems over the next 6 years, reducing CO2 emissions by 174 kilotons over the period.
Rune Gunnar Dige, Founder and CEO at RDG Collective, said the investment will enable them to further expand the sales network across Zambia, supporting the distribution of productive-use appliances. These appliances will empower the rural communities in Zambia with the ability to generate sustainable income, mitigate climate change, and improve their socio-economic status.