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Nithio, a leading investor in solar energy in Africa and known for its innovative approach to assessing credit risk, has secured a $3 million investment from the Schmidt Family Foundation to its investment vehicle, Nithio FI.

Nithio FI is a blended-finance vehicle that scales clean energy access by providing loans to distributors of solar home systems and solar productive use appliances that help households, micro-entrepreneurs, and smallholder farmers in Sub Saharan Africa to improve their livelihoods with better health, education, income, and quality of life outcomes. The data-driven finance vehicle leverages Nithio’s innovative AI models that standardise credit risk to inform sustainable financing.

Nithio said this approach by its investment vehicle enables it to fill a key market gap by lending to not only large, international solar companies, but also to small, local distributors that reach last-mile customers. The Schmidt Family Foundation joins other investors into Nithio FI, including US Development Finance Corporation, FSD Africa Investments, EDFI-ElectriFI, and Shell Foundation.

The investment into Nithio FI demonstrates the Schmidt Family Foundation’s commitment to scaling clean energy access across Africa and its focus on improving climate mitigation, adaptation, and resilience, said the Foundation.

Currently, the African continent only receives 3 percent of global climate finance flows, despite the region being the least climate resilient in the world. Solar energy products, such as solar lighting, communications, irrigation, and cooling systems, have tremendous potential to help increase the resilience of vulnerable communities, as noted by the World Bank and GOGLA’s Off-Grid Solar Market Trends 2022. For example, solar energy enables better water and food supplies through cooling, milling, and water pumps. Solar energy access also improves the ability of people to adapt their incomes in the face of climate shocks, as well as provides access to communication networks before, during, and after climate disasters.

“Nithio FI brings innovative technology to serve the hardest-to-reach communities in Sub Saharan Africa – people who contribute little to climate change but bear the worst of it, and who deserve the benefits of clean energy most of all,” said Aaron Mbati, portfolio director of the impact investing program at the Schmidt Family Foundation. “We are proud to contribute to Nithio FI to scale clean, affordable and sustainable energy access in Africa.”

The $3 million investment will prioritise the provision of more off-grid renewable energy products to households and individuals, said Nithio and Schmidt Family Foundation in a statement sent to Financial Nigeria. According to the statement, it is estimated that over 17,000 households and more than 77,000 individuals will benefit from the investment. It is further estimated that over 6,000 people will undertake more economic activity, 2,400+ people will be able to use products to support enterprises, more than $3.4 million cumulative additional income will be generated, and 17,800+ metric tons of CO2 will be avoided. The investment will enable Nithio to continue to scale its lending – the team plans to invest $170 million in total financing by 2025 and $1 billion in total financing by 2030.  

Established in 2006 by Eric and Wendy Schmidt, the Schmidt Family Foundation says it works to restore a balanced relationship between people and planet. Through grantmaking and investments, the foundation partners with communities around the world in working for renewable energy, resilient food systems, healthy oceans, and the protection of human rights. The foundation makes grants and impact investments through two programs: 11th Hour Project and Schmidt Marine Technology Partners.

With offices in Lagos, Nairobi, Kampala, London, and Washington, D.C., Nithio says it works to address the need for a significant increase in investment in Africa’s sustainable and just energy transition.