Press release: IDB Invest supports off–grid solar energy access for rural communities in Guatemala and Colombia, investing in Kingo Energy

IDB Invest, a member of the IDB Group, made a $5 million equity investment in Ignite Holding Company (Kingo Energy), a provider of prepaid solar energy to homes and small businesses in rural communities not connected to the electricity grid. The funds will help Kingo Energy to finance its growth business plan, through its operational subsidiaries in Guatemala and Colombia, and improve its business model.

Kingo Energy’s business model in Latin America combines Solar Home Systems with a pay-as-you-go service for the base-of-the-pyramid in remote rural communities. The company currently provides energy to users mainly in Guatemala and Colombia, and it expects to expand to other countries in Latin America.

It is estimated that between 30 and 40 million people in Latin America live in remote rural communities without access to the grid, paying for expensive, unsafe and polluting energy, according to Latin American Energy Organization. IDB Invest funds will help Kingo Energy increase the number of Kingo Energy units installed in off-grid homes and reduce their carbon footprint, as well as improve its business model with the launch of new products and services benefitting underserved rural communities.

The transaction includes a $4 million equity investment from the Clean Technology Fund (CTF) managed by IDB Invest. This contribution provides value-added patient capital to help Kingo Energy secure additional investment required to scale up while maintaining its core developmental impact.

The equity investment supports IDB Invest’s commitment to increase access to clean energy for everyone in the region. In the context of the economic crisis caused by the COVID-19, this improvement is even more relevant for the well-being of underserved, off-grid rural families.

In addition to the investment, IDB Invest will support Kingo Energy to develop an innovation laboratory and implement best practices in corporate governance and gender policies. The CTF participation includes a set of gender, diversity, and inclusion performance incentives to accelerate the implementation of a Gender Action Plan (GAP). This plan aims to increase women participation and recruitment in technical areas, a gender pay-gap analysis, a new product design methodology that includes women in the design phase, and an outreach strategy to empower indigenous women.

This investment potentially contributes to four of the United Nations Sustainable Development Goals (SDGs): Gender Equality (SDG 5), Affordable and Clean Energy (SDG 7), Industry, Sustainable Cities and Communities (SDG 11), and Climate Action (SDG 13).

 

About IDB Invest
IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social and environmental development in the region. With a portfolio of $12.1 billion in asset management and 333 clients in 24 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.

 

About Kingo Energy
Kingo’s mission is to turn lives on by providing prepaid solar energy services to off-grid communities, a scalable solution to one of the biggest challenges facing humanity: energy poverty. Kingo services around 45,000 homes in Guatemala and Colombia, alongside a network of thousands of shopkeepers that distribute our prepaid credits. Still, 17% of the world’s population lacks access to power. These 1.2 billion people pay for the most expensive energy substitutes (candles/kerosene/diesel), making solar here more affordable vs. any other market in the economy. Kingo has raised several equity and debt rounds led by prominent investors and institutions including PeopleFund, ENGIE Rassembleurs d'Energies, FCP (from EPM), FMO, Proparco, SEAF and the IDB Invest. Other key partners include Leonardo DiCaprio, who has joined the company as an investor and advisor.

 

Source: https://idbinvest.org/en/news-media/idb-invest-supports-grid-solar-energy-access-rural-communities-guatemala-and-colombia