Nigerian cleantech startup Arnergy raises $3 million to accelerate adoption. Femi Adeyemo and Kunle Odebunmi founded the startup in 2013, specialising in distributed renewable energy products and services for businesses and homes. Its primary market is Nigeria, and it intends to continue providing services in the 36 states through mini-grid developers.
Arnergy boasts of installing over 2 MW of electricity for over 2,000 customers. In 2019, it secured $4 million in debt financing from local and foreign lenders, including Nigeria’s Bank of Industry. It was on Bill Gates’s Breakthrough Energy Ventures Top 5 Cleantech list in 2021.
In an interview, CEO Adeyemo stated that Arnergy was not just looking to raise money; the company was waiting for specific triggers, such as eliminating fuel subsidies, approaching grid parity based on prices on the grid, and diesel prices. The startup last raised money in 2019. He stated that Arnergy is keen on capital efficiency.
He also noted that demand for solar systems has increased since 2019 when many Nigerians did not consider them economically viable.
Besides, he said solar panel and lithium battery prices have fallen globally, but they would have been significantly lower in Nigeria without the impact of exchange rate fluctuations. Recently, the country has seen an increased fluctuation in foreign exchange, where the Naira stands at more than ₦1500 per $1.
Arnergy, which has made 75% outright sales rather than leases since its inception, said it is currently bullish on leases.
Nigeria’s unstable grid is providing alternatives, as power output fell to 93.5% in late 2023, resulting in a blackout. When considering the off-grid option, Nigeria had the highest solar sales in Q2 2022, accounting for 78% of all sales in West Africa. Nigeria’s solar product sales increased by 450% between 2017 and 2022.
