Net-zero energy services company Husk Power Systems has become the first minigrid company to achieve profitability, an industry milestone that showcases the lucrative potential for minigrid adoption in emerging markets such as Africa.
According to a statement by Husk Power Systems, the company officially reached profitability in the fourth quarter of last year across its two primary markets, Africa and Asia, becoming the first-ever company to do so globally.
Husk Power’s ability to become profitable was attributed to two primary factors; the company’s unique platform approach which encompasses the entire rural ecosystem and its focus on technology and business innovation.
In Africa, profitability was largely driven by the success of Husk Power’s Nigeria Sunshot Initiative, launched in 2022. Under this initiative – which targets the construction of up to 500 minigrids by 2026 with the aim of providing access to electricity to over two million people – Husk Power now operates 12 off-grid minigrids in Nigeria, with targets to expand this figure five-fold towards the end of this year.
In addition to advancing electrification across rural communities, the company’s minigrids have enabled the transition away from diesel-fired power generation through the adoption of net-zero solutions, while accelerating the country’s energy transition goals by aligning with the wider Nigerian Electrification Project – a nationwide initiative aimed at delivering energy access to underserved communities. According to Manoj Sinha, Co-Founder and CEO of Husk Power Systems,
“When I took over the reins of Husk in 2014, we underestimated the amount of time and effort it would take to discover the right business model, right team and right technology platform to build a commercially viable minigrid company on two continents. It took grit and innovation to arrive here – at a profitable and scalable minigrid company.”
In November 2022, the company released what it called the world’s first detailed roadmap designed to accelerate the growth of the solar minigrids industry. The ‘Scaling Solar Hybrid Minigrids: An Industry Roadmap,’ was developed with support by development banks, private sector trade groups, think tanks and multilateral agencies, providing players with timelines and measures to scale up minigrid adoption. Through this initiative, a suite of projects are set to take off, enabling other companies to also become profitable across this fast-growing sector.
“Husk has proven that the rural minigrid business model works in Asia and in Africa, and in off-grid, under-the-grid, and grid-interconnected communities. It works and it is robust,” stated Board Chairman, Brad Mattson, adding that, “We have already scaled 10 times and are poised to scale another 10. We urge the industry to embrace the roadmap Husk followed. If funders and governments embrace the minigrid sector and this roadmap for success, together we can not only end energy poverty, but also lay the foundation for a rural industrial revolution.”