Utility giant acquires off-grid solar specialists Fenix International
French utility giant ENGIE is continuing its transition away from fossil fuels, after announcing the acquisition of a next generation energy company that offers decentralised solar solutions to communities across Africa.
ENGIE announced on Thursday (19 October) that it had agreed on a transaction to acquire 100% of Fenix International, which specialises in offering off-grid solar solutions across Africa. Fenix’s solar home system (SHS) already benefits 140,000 people across Uganda and has recently expanded into Zambia with plans in place to spread across the continent.
“We believe that combining the strengths of ENGIE, a global energy player and Fenix, a successful company with very strong customer focus, high-quality products and an experienced team anchored in the heart of Sub-Saharan Africa, will enable faster deployment of SHS to the large African population still lacking access to electricity,” ENGIE Africa’s chief executive Bruno Bensasson said.
“We do believe that universal access is now reachable in a foreseeable future by the combination of national grids extension, local micro-grids and solar home systems, depending on the local characteristics of the energy demand.”
The SHS enables customers to self-install a system to receive seven days of free power through a lease-to-own approach. At this point the system is locked until the customer makes a payment via a mobile app. This pay and lock method carries over for 24 to 30 months, at which point the system permanently unlocks. Customers can also build a credit score through the system to gain access to more products such as cookstoves or more lights and panels.
Fenix will become the first SHS company to be purchased by a major energy firm, and builds on ENGIE’s goal of providing 20 million people access to decarbonised and decentralised energy by 2020.
Although ENGIE’s goal is global, the energy firm is focusing on Africa to stimulate change. More than 600 million people lack access to modern energy on the continent. The International Renewable Energy Association (IRENA) claims that Africa could generate 50% of its energy from renewable sources by 2030.
The World Bank estimated that up to 99 million households – more than a third of which are off-grid – will rely on solar energy by 2020. Research from Bloomberg New Energy Finance (BNEF) suggests that Africa is the fastest growing market in this regard.
The acquisition also builds towards ENGIE’s goal to secure a 25% contribution from renewables to the group’s energy generation portfolio.
ENGIE is currently orchestrating a $16 billion divestment plan to move away from fossil fuels and into areas such as renewables, natural gas and nuclear by 2018. The divestment plan was launched in February 2016 and one years later, the company has signed asset disposals amounting to 50% of its target.
In the US, ENGIE closed the sale of 8.7GW of thermal assets, while two coal-fired power plants in India and Indonesia – representing 3GW of generation – were also moved on. The company’s 40.5% stake in a 2GW Paiton power plant in Indonesia has also been sold. The company will seek to reinvest the $16bn into its new energy services.