April 18, 2024

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Nithio Receives $3m Investment to Expand Solar Energy in Africa

SAN FRANCISCO, California – Nithio secured a $3M investment from the Schmidt Family Foundation to its investment vehicle, Nithio FI. Nithio is a leading investor in solar energy in Africa, known for its innovative approach to assessing credit risk. 

Nithio FI is a blended-finance vehicle that scales clean energy access by providing loans to distributors of solar home systems and solar productive use appliances that help households, micro-entrepreneurs, and smallholder farmers in Sub Saharan Africa to improve their livelihoods with better health, education, income, and quality of life outcomes. The data-driven finance vehicle leverages Nithio’s innovative AI models that standardize credit risk to inform sustainable financing. This approach enables Nithio FI to fill a key market gap by lending to not only large, international solar companies, but also small, local distributors that reach last-mile customers. The Schmidt Family Foundation joins other investors into Nithio FI, including US Development Finance Corporation, FSD Africa Investments, EDFI-ElectriFI, and Shell Foundation.

The investment into Nithio FI demonstrates the Schmidt Family Foundation’s commitment to scaling clean energy access across Africa and its focus on improving climate mitigation, adaptation, and resilience. Currently, the African continent only receives 3% of global climate finance flows, despite the region being the least climate resilient in the world. Solar energy products, such as solar lighting, communications, irrigation, and cooling systems, have tremendous potential to help increase the resilience of vulnerable communities, as noted by the World Bank and GOGLA’s Off-Grid Solar Market Trends 2022. For example, solar energy enables better water and food supplies through cooling, milling, and water pumps. Solar energy access also improves the ability of people to adapt their incomes in the face of climate shocks, as well as provides access to communication networks before, during, and after climate disasters. The Schmidt Family Foundation and Nithio FI’s partnership will catalyze financing to build climate resilience in the region. 

“Nithio FI brings innovative technology to serve the hardest-to-reach communities in Sub Saharan Africa—people who contribute little to climate change but bear the worst of it, and who deserve the benefits of clean energy most of all,” said Aaron Mbati, portfolio director of the impact investing program at the Schmidt Family Foundation. “We are proud to contribute to Nithio FI to scale clean, affordable and sustainable energy access in Africa.” 

The $3M investment will prioritize providing more off-grid renewable energy products to households and individuals. From this investment, Nithio predicts that over 17,000 households and more than 77,000 individuals will benefit. Over 6,000 people will undertake more economic activity, 2,400+ people will be able to use products to support enterprises, more than $3.4M cumulative additional income will be generated, and 17,800+ metric tons of CO2 will be avoided. The investment will enable Nithio to continue to scale its lending – the team plans to invest $170M in total financing by 2025 and $1B in total financing by 2030. 

“Nithio is proud to partner with the Schmidt Family Foundation, an organization that is strongly aligned with Nithio’s mission to expand climate justice through clean energy access in Africa,” says Kate Steel, Nithio Co-Founder and CEO. “We look forward to expanding our lending with the Foundation’s support and building climate resilience through increased energy access.” 

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