Market Update: More broadband rollout expected in Africa next year

More broadband rollout expected in Africa next year

Highlights

• African countries are looking to roll out more broadband networks in 2023 as mobile and internet service providers expand their investment in undersea and land-based cables.
• The recent landing of a 45,000-kilometer subsea cable in South Africa by MTN is just the latest major investment in internet infrastructure on the continent.
• In addition, internet services originating in space become a financially viable option for some consumers. Broadband gives users access to faster internet with a minimum of 25 Mbps in download and 3 Mbps in upload speeds.

Source: TechCabal

Our Takeaway

As Africa expands by population and economic activity, mobile technology will be even more integral to how people live and how businesses operate, positioning the continent as the fastest-growing mobile market globally for the next decade. Also, with the prices of smartphones expected to drop further, more of the continent’s young population will come online, creating a huge potential market for digital services. Increasing investments in new network capabilities, strong investor confidence, and consumer interest in digital platforms indicate a digital-centric future for sub-Saharan Africa.

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Shell completes Daystar Power acquisition after approval

Highlights

• Daystar Power, a West Africa-focused provider of hybrid solar power solutions to commercial and industrial (C&I) businesses, has been fully acquired by Shell following the approval of regulatory authorities. 
• Founded in 2017, Daystar Power is one of the leading off-grid power service providers on the continent, with its solutions “Solar-as-a-Service” and “Power-as-a-Service” that significantly reduces clients’ overall power costs.
• The acquisition will allow Daystar to grow its operations in the region while expanding across the continent. The company aims to increase its installed solar capacity to 400MW by 2025.

Source: Disrupt Africa

Our Takeaway

The decreasing costs of solar systems, relative to either grid or diesel generators, have helped on-site solar microgrids—provided by companies like Daystar—become economically viable alternatives for commercial and industrial use in Africa. Daystar has 300 power installations with an installed solar capacity of 32 megawatts but aims to boost capacity and also expand to eastern and southern Africa, a goal that would be easier to reach with Shell. For investors who have provided its $92 million funding so far, per Crunchbase, this acquisition means they exit the solar provider, most likely at a premium.

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Kenya-based Solarise Africa bags further $3m funding 

Highlights

• Solarise Africa was awarded $3 million by EDFI ElectriFI to provide tailored financing solutions for decentralized energy solutions to selected commercial and industrial (C&I) customers across Africa.
• The funding comes less than a month after a $33.4 million debt raise by the Kenya-based startup, which also has operations across South Africa, Uganda, and Rwanda.
• The company, which provides smart financing via a selected group of partners, is already well-capitalized and has now secured successive funding to help it grow. It plans to expand its portfolio in Kenya and other selected African countries. 

Source: ABC

Our Takeaway

The significance of Solarise’s funding lies in two major points. Firstly, an increasing number of African startups are turning to debt financing after more than $700 million in debt was raised last year. And secondly, financiers, who were skeptical about funding ventures in the renewable energy space, are increasingly funding the continent’s leading solar providers. Similar companies like CrossBoundary, Sun King, Daystar Power, and Havenhill have attracted significant funding in the past year, suggesting the perception toward the renewable energy opportunity in Africa could be changing.