Acumen’s Hardest-to-Reach initiative provides innovative blended-currency loan to Yellow Malawi to support energy access

Acumen’s Hardest-to-Reach (“H2R”) initiative has invested $2 million in Yellow Malawi, an off-grid solar distribution company in Malawi with the aim to fund Yellow Malawi’s inventory purchase of solar home systems and enable 182,000 people to receive energy access, 145,000 of whom will likely access energy for the first time. 

Given the significant devaluation of some of the region’s currencies, most energy access companies prefer to raise debt in local currency to match it to the currency of their revenues. However, very few lenders can currently provide loans in Malawian Kwacha to energy access companies due to limited and expensive hedging options and currency convertibility challenges. 

Acumen has therefore structured the investment as an innovative blended-currency two-tranche loan. The first tranche worth $1 million will be disbursed in US dollars to Yellow Malawi, who will make repayments in Malawian Kwacha. Acumen has been awarded a subsidy from the TCX EU Market Creation Facility to reduce hedging costs and make the loan more attractive for both Yellow Malawi and Acumen. The second tranche in the amount of $1 million will be disbursed and repaid in US dollars. This multi-currency structure will enable Yellow Malawi to grow their customers and revenue in a more sustainable way with lower FX risk exposure.

Maya Khonje-Stewart, Yellow Malawi Co-Founder said: “This partnership with Acumen allows us to reach even more Malawians who deserve access to clean, affordable, and reliable energy. Acumen’s Hardest-to-Reach initiative understands the unique local context and has designed financing that not only meets our needs but also advances our mission to bring energy to those who need it most. The innovative structure addresses critical risks to our business and customers in Malawi, and will allow us to reach more households with reliable and clean energy solutions.”

Sandra Halilovic, Head of Acumen’s H2R development facility stated: “Yellow Malawi’s impact is highly aligned with Hardest-to-Reach’s mission, and this loan will benefit thousands of Malawians over the next few years. H2R is also thrilled to be supporting a company founded and local by local African entrepreneurs like Maya Khonje-Stewart and Michael Heyink, who are at the forefront of driving energy access across the continent. We’re also pleased to have been awarded a hedging subsidy from TCX’s EUR Market Creation Pricing Facility and are excited to showcase this innovative funding structure.”

About Yellow

Yellow Malawi is a solar home system and mobile phone distributor that provides energy access to off-grid and rural customers in Malawi, one of the most energy-poor countries in the world. Yellow Malawi has served over 530,000 customers with energy and 62,000 people with smartphones since its inception. The Company developed a profitable business model early on through the provision of energy through the PAYGo model, its network of over 1,000 sales agents and the development of its technology platform Ofeefee, which enabled it to deliver on its mission to electrify off-grid households at scale. 

About Acumen’s Hardest-to-Reach Initiative

Acumen Hardest-to-Reach is a $250 million initiative designed to activate clean energy markets in 16 of Africa’s underserved geographies. Using a variety of financial instruments, H2R invests in off-grid solar companies working to provide energy access for unelectrified households. Over the next 10 years, Acumen’s goal is to help achieve universal energy access in sub-Saharan Africa by electrifying 72 million people with solar products and avoiding 5 million tons of carbon emissions.