A Rwandan start-up, Ampersand, announced that it had secured a $ 9 million loan facility from the American International Development Finance Corporation (DFC) to expand its operations in Rwanda and Kenya.
Ampersand is a local electric motorcycle company that has successfully deployed electric motorcycles with battery swap stations.
The deal is DFC’s first electric mobility loan and signifies growing investor confidence in Africa’s growing electric mobility sector.
According to company officials, the $ 9 million loan will allow Ampersand to increase the number of electric motorcycles in Rwanda and Kenya to several thousand by the end of 2022.
The loan comes on top of a $ 4 million Series A ampersand obtained earlier in 2021, which was backed by Silicon Valley investor Ecosystem Integrity Fund (EIF) and TotalEnergies.
The company was launched commercially in 2019 with seed capital of approximately $ 600,000.
It also received support and funding from FactorE Ventures in 2018, the Rwanda Green Fund, USAID’s Development Innovation Ventures, the Shell Foundation, the UK FCDO’s Frontier Technology Livestreaming fund, the New Zealand government and ‘a loan from the Blue Haven Initiative Catalytic Fund.
“We are delighted to have DFC on board this historic investment, which is scaling up to electrify all of East Africa’s 5 million motorcycle taxis by 2030. DFC’s support underscores sustainability and the investment ability of electric two-wheelers for mass market customers ”Josh Whale, founder and CEO of Ampersand said.
The company currently employs around 45 people and has developed much of its own proprietary technology, including chips in battery packs.
Electric mobility is becoming more and more popular around the world for its environmental conservation characteristics as well as its long-term profitability.
The firm is banking on the growing popularity of the sector around the world, which has enabled start-ups in the sector to easily raise capital driven by changes in the sector.
“It’s a new and exciting industry. There is a lot of interest and investment around climate change and a strong belief that electric mobility is going to play a big role in the future and is commercially viable, ”Whale said in a previous interview.
The company has also previously said it is ready to partner with actors by working with service station operators to set up battery swap stations as well as motorcycle manufacturers.
If Rwanda were to have all electric motorcycles in the coming years, estimates show it would take an investment of around $ 75 million with huge returns for investors.
In April this year, the Cabinet approved an electric mobility adaptation strategy aimed at increasing the number of electric vehicles and motorcycles.
Key elements of the strategy include a number of incentives that apply to electric vehicles, plug-in hybrid electric vehicles and hybrid electric vehicles.
Officials say the incentives are aimed at attracting investment in the new and upcoming industry.
With an annual vehicle growth rate of 12% in Rwanda, the incentives aim to lower the bar for the adoption of electric vehicles and motorcycles taking into account the popularity of gasoline engines.
The incentives cover the main weak points in the deployment process of electric vehicles and motorcycles, including the cost of energy, taxes, infrastructure, among others.
The main goal is to make the ownership and maintenance of electric cars and motorcycles less expensive compared to a gasoline vehicle.