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    Arnergy Secures $3 Million Funding Boost to Drive Clean Tech Expansion in Nigeria

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    Arnergy, a Nigerian clean tech startup, has successfully raised $3 million in funding from All On, a leading off-grid energy impact investment company. This latest injection of capital is aimed at scaling operations and accelerating the adoption of Arnergy’s innovative renewable energy products and solutions.

    This recent funding comes on the heels of Arnergy’s $9 million Series A round in 2019, where it garnered support from All On, Breakthrough Energy Ventures, ElectriFI, and Norfund. The company is gearing up for its Series B round, anticipated to conclude this quarter, with the goal of expanding its operations and further increasing the adoption of clean energy solutions.

    Established in 2013 by Femi Adeyemo and Kunle Odebunmi, Arnergy specializes in distributed renewable energy products and services tailored for both businesses and homes. With a primary focus on the Nigerian market, the company aims to extend its services across all 36 states through collaborations with mini-grid developers.

    Arnergy has already demonstrated its impact, having installed over 2 MW of electricity for more than 2,000 customers. The startup secured $4 million in debt financing in 2019 from a mix of local and foreign lenders, including Nigeria’s Bank of Industry. In 2021, Arnergy earned recognition on Bill Gates’s Breakthrough Energy Ventures Top 5 Cleantech list.

    CEO Femi Adeyemo, in an interview, emphasized that the company’s fundraising efforts were not solely driven by financial considerations. He outlined specific triggers, including the elimination of fuel subsidies, approaching grid parity based on grid prices, and diesel price dynamics. Adeyemo underscored Arnergy’s commitment to capital efficiency.

    Adeyemo noted the increased demand for solar systems since 2019 when many Nigerians started recognizing their economic viability. He highlighted the global decline in solar panel and lithium battery prices, noting that the impact of exchange rate fluctuations has somewhat offset these reductions in Nigeria, where the Naira currently stands at over ₦1500 per $1.

    Arnergy, which has predominantly made outright sales (75%) rather than leases, expressed a current bullish outlook on leases. This strategic shift aligns with the company’s response to the changing dynamics in Nigeria’s energy landscape.

    The startup’s optimism in leasing is buoyed by Nigeria’s unstable grid, which witnessed a drastic decline to 93.5% power output in late 2023, resulting in a blackout. With a growing interest in off-grid alternatives, Nigeria experienced the highest solar sales in West Africa during Q2 2022, accounting for 78% of all sales. Solar product sales in Nigeria have surged by an impressive 450% between 2017 and 2022, signaling a significant shift towards cleaner energy solutions in the country.

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