Malawi’s own household solar enabler
Malawi’s own household solar enabler
Zuwa Energy is a Malawian solar company founded in 2016 to help the country’s many off-grid low-income households access home solar power and efficient appliances on pay-as-you-go terms. The company considers itself part of the second generation of pay-as-you-go innovators: with successful peers to learn from in other African countries, Zuwa has been the first solar company to apply this model in Malawi.
Zuwa’s basic systems power lights and charge phones, replacing daily household purchases such as candles and batteries. The company also offers larger systems including energy-efficient refrigerators and televisions, which are productive assets for rural entrepreneurs wishing to sell e.g. cold drinks or a seat to watch the football match of the day. Whether the systems are cutting household expenses or opening up new business opportunities, Zuwa sees that the benefits make it easy for customers to afford the pay-as-you-go terms.
Household solar power is already relieving energy poverty for some Malawian households and helping businesses access reliable power on simple terms. Zuwa has striven to make this case to investors so that it can bring more systems to more people, challenging the conventional wisdom of investors in Malawi, which considers long-term repayment by households with low incomes and no credit history to be too risky.
Zuwa Energy came to GET.invest by way of earlier technical assistance from Catalyst Energy Advisors and its VentureBuilder subsidiary, which helped the young company weather the conditions of the COVID-19 pandemic. Emerging from this crisis, Zuwa was encouraged to apply to GET.invest’s Finance Readiness Support, a service for early-stage and locally-owned companies where Catalyst Energy Advisors is one of the eight advisory firms involved.
During Zuwa’s participation in the GET.invest Finance Readiness Support, the advisors focused on investment readiness and refining its financial model. They guided Zuwa through a long checklist of necessary elements, such as realistic financial projections supported by unit economics, a sensitivity analysis and a budget analysis. These backed up a bankable business plan with all the key documents, also extending to a pitch deck, competitor analysis and customer segmentation.
The assistance couldn’t have come at a better time. In 2023, a golden window of opportunity opened with a call from the Malawian government and the World Bank, who were launching the Malawi Off-Grid Market Development Fund – also known as the Ngwe Ngwe Ngwe Fund. Zuwa saw the chance to apply with all the necessary documents at their fingertips. Having recently prepared the groundwork under the GET.invest Finance Readiness Support, they were easily able to pass the initial screening and shortlisting, and then provide a full business plan.
As a result, in September 2023, the World Bank and the Malawian government awarded Zuwa an inventory financing loan of more than €2.4 million from the Ngwe Ngwe Ngwe Fund. Zuwa estimates that this financing will enable the company to extend renewable energy access to 42,000 additional Malawian households through solar home systems.
The company is also in advanced talks with two other investors for equity and additional debt financing. By the end of 2023, Zuwa expects to have created more than 100 new jobs, having started the year with a staff of just 35. Throughout the year, the company opened five new sales outlets, with sales now covering every district of Malawi. With the financing being unlocked, Zuwa aims to sell 100,000 solar home systems across the country by 2030, and to become the premier asset financing company for clean energy and efficient appliances targeting off-grid low-income households in Malawi and southern Africa.