MICROCAPITAL BRIEF: Mwezi Nets Inaugural $500k Debt Investment from Build Fund of Bamboo Capital, UNCDF to Expand Access to Pay-as-you-go Solar Products in East Africa

Luxembourg-based Bamboo Capital Partners and the UN Capital Development Fund (UNCDF) recently partnered to create the Build Fund, whose first investment is a loan of USD 500,000 for a working capital facility in favor of Mwezi Limited, a distributor of solar products in Kenya. Mwezi plans to use the investment to expand: (1) its geographic footprint in Kenya as well as to enter nearby markets such as Ethiopia, Rwanda and Uganda; and (2) its product lineup to include more products that are specific to agricultural and other business uses.

Founded in 2017, Mwezi aims to create “health, wealth, education and environmental impact in a sustainable and scalable [manner,] using market-based solutions.” The firm sells products such as: (1) solar home energy systems; (2) solar-powered devices, including televisions, radios, and lighting for home and marine use; and (3) energy-efficient stoves and other kitchen appliances. The firm delivers these products to low-income households in rural sub-Saharan Africa in a pay-as-you-go format. This allows users to make small payments to enable their products for a given period of time. Meanwhile, Mwezi uses remote technology to disable and enable the products depending on when users choose to make their next payments. Users that make consistent payments can own their devices within nine months to 19 months. Financial data on the firm have not been released.

Founded in 2018, the Build Fund deploys blended finance – a combination of public and private funds – to small and medium-sized enterprises in low- and middle-income countries that are a part of the “missing middle” – too large for microfinance, but too small for traditional banking services. The actual and target sizes of the fund have not been released.

Established in 2007, Bamboo Capital deploys investments intended to “generate lasting impact and improve the lives of the world’s most marginalised communities while delivering strong financial returns” in four main sectors: access to clean energy, access to healthcare, agribusiness and financial inclusion. Since its launch through 2020, the firm raised approximately USD 370 million for investments in approximately 30 countries.

Established in 1996 and headquartered in the US city of New York, UNCDF endeavors to create opportunities for poor people and their businesses by increasing access to microfinance and other forms of investment capital. The organization operates in 47 countries in Africa, Asia and the Pacific with a particular commitment to countries emerging from crises. For 2020, UNCDF had a budget of USD 75 million and supported initiatives providing financial services to 3 million unbanked and underbanked clients.

By Teo Lin-Bianco, Research Associate

Sources and Additional Resources

UNCDF press release
https://www.uncdf.org/article/6849/the-build-fund-makes-inaugural-investment-into-east-african-off-grid-solar-energy-solutions-distributor

Mwezi homepage
https://mwezi.org/

Bamboo Capital Partners homepage
https://www.bamboocp.com/

Previous MicroCapital article on Bamboo Capital
https://www.microcapital.org/microcapital-brief-fie-ngo-of-bolivia-buys-back-equity-stake-in-its-spanish-subsidiary-confie-from-impact-investor-bamboo-capital/

UNCDF 2020 report
https://annualreport.uncdf.org/2020

Previous MicroCapital article on UNCDF
https://www.microcapital.org/microcapital-brief-igad-uncdf-to-research-harmonize-remittance-policies-in-east-africa/

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