Press release -
Swedfund invests additional USD 5 million in Husk Power Systems to support energy access in Nigeria and India
On October 20th, Swedfund, Sweden’s Development Finance Institution, invested an additional USD 5 million in Husk Power Systems (Husk), a rural electrification company. The funding will contribute to the continued construction of mini grids in Nigeria and India, enabling increased access to clean, affordable, and reliable energy in rural and semi-urban areas.
Husk designs, builds, owns and operates mini grids in India and Nigeria, serving households and small businesses with round-the-clock access to renewable power, primarily generated from solar energy, supplemented by batteries and with biomass gasification as backup.
“The investment in Husk will contribute to the expansion of new and improved access to energy, empowering communities to overcome the challenges posed by unreliable or absent grid infrastructure. It will also help offsetting the use of diesel, support climate action and promote socio-economic development and poverty reduction in rural areas,” says Gunilla Nilsson, Investment Director Energy & Climate at Swedfund.
According to the International Energy Agency (IEA), approximately 770 million people worldwide lack access to electricity, with the majority residing in Africa.
In Nigeria, where the majority of solar mini grids replace diesel generators, nearly half of the 210 million population lacks access to electricity. Solar mini grids have been identified as a cost-efficient technology that can support the government in its goal of full electrification by 2030. Husk aims to be part of this ambition by electrifying 500 communities by 2026, benefiting more than two million people, including households and micro, small, and medium-sized enterprises (MSMEs). Husk also has the potential to contribute to women's empowerment by helping to reduce the time burden of unpaid domestic work and through targeted efforts to serve women led MSMEs.
With India approaching 100% grid electrification, the focus for mini grids has shifted towards providing better quality and reliability in states with unreliable power supply. However, daily power cuts remain a reality, especially in rural areas, where the grid's instability affects around half of the rural households and a third of the urban households. Husk's mini grids enable its more than 10,000 MSME customers to access clean and affordable energy, support productivity, and create more job opportunities.
The investment in Husk also provides an opportunity for Swedfund to continue its role in value addition, by further building on existing technical assistance initiatives in the areas of digitalization, gender, impact measurement and management, and strengthening ESG practices. One example, within the digitalization area, is the AI powered platform that allows more efficient management of rural mini grids operating under challenging weather conditions and cost constraints.
Husk Power Systems was founded in 2008 as an off-grid energy access company, initially providing electricity to rural households in India via mini-grids. Over the years, the company expanded its services to include commercial customers, institutions, and small factories, focusing on increasing commercial viability.
Swedfund first invested in Husk in 2017 with a USD 5 million dollar investment, along with Engie Rassembleurs d’Energies, and FMO and others. The current funding round is led by STOA Infra & Energy, with additional contributions from US International Development Finance Corporation (DFC) and Proparco.
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About Swedfund
Swedfund is Sweden's development finance institution with the mission to contribute to poverty reduction through sustainable investments in developing countries. Our investments in the private sector contribute to a growing number of jobs offering decent working conditions and increases access to essential products and services like electricity and healthcare. Climate and gender are themes that permeates our investment process.
Swedfund invests in energy & climate, financial inclusion and increased access to capital for micro, small and medium-sized companies as well as healthcare and digitalization.
We are part of Swedish development corporation, and we measure and report all our results. As a state-owned company, Swedfund is managed by the Ministry of Finance. We are financed through reflows from the portfolio and capital injections from the development assistance budget. The return from the portfolio finances our operations and we reinvest reflows from our portfolio in new projects, i.e. we recycle our capital injections.
For more information: please visit www.swedfund.se/en| www.edfi.eu
