Shell-funded impact investment company All On has announce a $1.5m investment in Auxano Solar Nigeria Limited to scale its operations over the next five years.
In a statement on Tuesday, All On said the investment would guarantee the expansion of Auxano’s solar panel assembly capacity by over 50 percent and is a great win for local content.
All On Programs and Investments Manager, Afolabi Akinrogunde said: “Auxano’s growth as the first private assembler of solar panels is a success story that ought to inspire other players in the renewable energy sector in Nigeria.”
All On’s contribution will be a blend of equity and debt investments that will facilitate the increase of Auxano’s capacity utilisation by funding its expansion plans, covering facility relocation and meeting the working capital financing needs of a rapidly growing company that is also involved in the sales and distribution of renewable energy components such as hybrid inverters and charge controllers.
The investment will also enhance the company’s services such as after-sales installation, management and maintenance services of renewable power solutions to its customers.
The All On Hub will also provide development support, including functional and innovation support, business opportunity development and investor/donor engagement.
“This continued support from All On is in response to an increase in demand of our goods and services,” said COO of Auxano Solar, Chuks Umezulora. ”It is also an indication that Nigerians are increasingly becoming more accepting of solar as an alternative to on-grid energy and diesel generators.”
At the initial stages of the business just three years ago, the company hired students from a local technical school who were trained by foreign experts to manage costs. Today, Auxano is benefitting from an investment in excess of $1m.
“We are very happy about this announcement which aligns with our policy objective of driving economic development,” said Rural Electrification Agency MD, Ahmad Salihijo Ahmad.
“This support from All On comes during a great economic downturn and injects significant capital that will scale Auxano’s solar panel assembly operations at a time when localizing supply chains is more critical than ever. We hope that this investment will encourage many more investors to see that Nigeria’s renewable energy sector is still very much open for business.”
Some international donor agencies and partners also share this sentiment.
“We are particularly excited about this commitment from All On and our collaboration to support African solar enterprises in improving lives and livelihoods amidst COVID-19. This particular investment by All On is special, as it is the continuation of a journey we started as co-investors in Auxano’s first assembly plant expansion under the 2018 All On-USADF Nigeria Off-Grid Energy Challenge,” said President and CEO of the U.S. African Development Foundation, C.D. Glin.
The successful expansion of Auxano’s solar panel assembly plant and its business practices have led to increased demand for the company’s panels, products and services. This has in turn resulted in a supply challenge which this investment is intended to address. Another significant contributing factor of the increased demand for the company’s solar panels is the relative short delivery time compared to imported goods.
Most significantly, the current COVID-19 crisis has caused severe disruptions in the importation of solar panel parts. Having an operational in-country assembly plant has been an industry saver, first because the solar panel assembly sector has been able to survive and customers have been able to purchase goods in Naira rather than foreign currency—a trend Auxano’s expansion will make more viable.
“The current supply chain disruptions and market volatility demonstrate yet again, the importance of local assembly for the growth of the renewable energy sector in Nigeria,” said All On CEO, Dr. Wiebe Boer.
“Auxano Solar Nigeria is a textbook example of what is possible even in times of crisis when we promote local content and invest in capacity-building in country. This is a company that has demonstrated the entrepreneurial spirit and execution focus we know Nigerian companies are capable of.”
Auxano is one of the four companies selected by All On to partner in the COVID-19 Solar Relief Fund in April 2020 for the deployment of power to emergency health care and emergency response centres in Nigeria.
The company deployed the solar power solution at the COVID-19 isolation ward at the National Orthopaedic Hospital, Igbobi, Lagos.