Orb Energy, a Bengaluru-based solar firm, has raised more than $15 million in equity and debt financing to boost its in-house financing facility, which supports the installation of solar PV rooftop systems by small- and medium-sized enterprises (SMEs) in India; and to further expand its Kenya operations.
The Netherlands Development Finance Company (FMO) has provided $4 million in equity, while in another deal, Orb signed a loan agreement with the Overseas Private Investment Corporation (OPIC) – the United States development finance institution – for $10 million in long-term debt.
With these investments, Orb expects to see more than a threefold growth in its solar PV rooftop sales, from 15 MW in FY 17-18, to 50 MW by FY 19-20.
“We are extremely pleased that FMO increased its equity position in Orb Energy, adding $4 million to its earlier investment of $2 million in 2015,” said Damian Miller, CEO, Orb Energy.
“We see this as a vote of confidence in our unique approach to the solar market in India, which has allowed us to leverage a further $10 million from OPIC to expand our finance platform for SMEs looking to save money on their electricity bill with their rooftop solar system,” he added.
In India, rooftop solar systems offer commercial and industrial (C&I) customers a three- to four-year payback without any subsidy – an unheard-of return on investment on an unsubsidized solar power system. However, many cash-constrained SMEs in India cannot afford the up-front costs of solar without credit. Here, Orb offers a finance facility to SMEs that matches their payback period, after which all their power is effectively free.
Orb’s Kenya venture
Orb has also successfully raised more than $1 million for its solar operations in Kenya. Pamiga, an investor in African financial institutions and SMEs, provided $500,000 in equity. Adding to it, $550,000 has come from DEG – Germany’s development finance institution – using funds from the German Federal Ministry for Economic Cooperation and Development’s (BMZ) Upscaling Program.
These funds will be used to further expand Orb’s residential and commercial solar business in Kenya, where the company has sold more than 10,000 systems since 2014.
Orb is a vertically integrated company, manufacturing solar PV modules and solar water heating systems in Bengaluru, Karnataka. It has sold more than 150,000 systems in India since 2006.