There are several options that Jesse Muriithi could explore to access funding for his solar

backup gadget:

1. Venture capital

Venture capital is a form of private equity and a type of financing that investors provide to
startup companies and small businesses that are believed to have long time growth potential.
However, it does not always take a monetary form; it can also be provided in the form of
technical or managerial expertise. Accordingly, Jesse Muriithi could consider approaching
venture capital firms that specialize in funding startups and new technology. Venture
capitalists may often provide funding in exchange for a share of ownership in the company.

Pursuant to section 12(1)g of the Capital Markets Act CAP 485A venture capital companies
are to be regulated by the capital markets authority.

The requirements for a legally registered venture capital company are in Regulation 4 (1) of
the Capital Markets (Registered Venture Capital Companies) Regulations, 2007

Some of the Venture capital funds include:

a) E3 Capital which invests in small renewable energy businesses in Africa that

specialize in promoting low-carbon and low-cost electricity access solutions in
rural areas.
b) Africa Renewable Energy Fund by BIO invest, is a €9 million fund is dedicated
to renewable energy projects in sub-Saharan Africa.

2. Grants:

A grant is a fund given by an end entity grant-often a public body, a charitable foundation, or
a specialized grant-making institution- to another entity usually a non-profit organization, or
a business for a specific purpose linked to public benefit. Unlike loans grants are not paid
back.

There are many organizations that offer grants for clean energy technology, mostly in
developing countries. In Kenya, funding options available for the renewable sector players
include:
 a) Development finance

Africa Development Bank (AfDB) has several funds targeting the renewable energy sector
across Africa including Kenya. Notably the Facility for Energy Inclusion, a USD 400million
fund that invests in small scale renewables. The fund is intended to finance commercial and
industrial captive power projects, mini-grids and small-scale Independent Power Producers
(IPPSs) just like Jesse Muriithi’s.

b) Climate finance

Scaling-Up Renewable Energy Programme (SREP), a USD 50 million project, seeks to boost
the expansion in geothermal development and mini grid capacities. Moreover, The Africa
Climate Change Fund (ACCF), a USD 21.5 million fund by the African Development Bank,
seeks to strengthen African economies’ resilience to the negative impacts of climate change
and hasten the transition to clean, renewable and sustainable energy sources for growth.

c) Commercial funding

Besides commercial banks, investment companies, private equity and venture capital
investors are also targeting renewable energy sector across Africa. Noteworthy investors
within the sector include: Actis LLP, AHL Ventures, Ascent Capital, Finnfund, DOB Equity,
inter alia. These investors fund projects through equity and/or debt and have varying criteria
when scouting for investor ready projects in Africa.

Jesse Muriithi needs to research the above opportunities and apply for relevant grants to
support his project.

3. Government support:

Jesse Muriithi could explore government support programs that provide funding for clean
energy initiatives. In Kenya, for example, the government has established the Kenya Climate
Innovation Center to support entrepreneurs developing climate-friendly technologies.

Kenya Climate Innovation Center offers incubation, capacity building and financing options
to new, small and medium business ventures and Kenyan entrepreneurs that are developing
innovations to address the challenges of climate change.
In addition, the government of Kenya provides access to concessional funding to clean
energy projects. The government enacted the Feed-in Tariff policy in 2008 to guarantee a
technology based fixed price in US dollars for power feeding into the national grid. This
power purchase guarantee provides cash flow certainty to project developers who are then
able to access project finance from other sources; on the basis of their lower income
generation risk.

4. Bank loans:

Jesse Muriithi could also consider approaching banks for loans to fund the production and
distribution of his solar backup gadget. He could explore loans explicitly designed for small
businesses and entrepreneurs. However, the interest rates on loan facilities may be expensive
thus lowering the Internal Rate of Return (IRR)1 for his renewable energy project.

Overall, Jesse Muriithi should research all the available options and choose the funding
strategy that aligns with his goals and priorities.

5. Crowd funding

The capital markets (investment-based crowdfunding) regulations, 2022 under regulation 2

define crowdfunding as, crowdfunding” means the act of raising money from many
individuals or entities to either finance a project or business through a crowdfunding
platform. The same regulation defines a crowdfunding platform as a website, internet based
portal or such other technological application, which facilitates interactions between investors
and issuers and other related interactions.

Under the same regulation there is a provisions for issuers, it defines issuers as, a company
which issues the security or investment instrument, which is hosted on the crowdfunding
platform for purposes of crowdfunding.

The eligibility for one to be an issuer is governed by regulation 13 of the capital markets
(investment-based crowdfunding) regulations, 2022,;

A micro, small or medium enterprise incorporated in Kenya with a minimum of two

years’ operating track record and a good corporate governance record shall be eligible to

1
IRR is a metric used in financial analysis to estimate the profitability of potential investments.
 raise funds through a crowdfunding platform in exchange for the issuance of an
investment instrument.

Despite sub-regulation (1), start-ups with a good operating track record and a good corporate
governance record shall be eligible to raise funds through a crowdfunding platform.

Regulation 14 provides for the aggregate amount that may be raised by an eligible micro,
small and medium enterprises or startup within a twelve months period shall be a maximum
amount of Kenya shillings one hundred million.

A crowdfunding platform operator may apply to the Authority for a no-objection where an
issuer seeks to raise more than the set maximum amount within the given duration.

The Authority may issue a no-objection to raise additional funds subject to such conditions as
may be imposed from time to time.

Regulation 15 stipulates the entities prohibited from raising funds through a crowdfunding
platform. They are as follows; public listed companies and their subsidiaries; entities with a
poor governance record; entities that intend to use the funds raised to provide loans or invest
in other entities; and any other entity as may be specified by the Authority.

Therefore if Jesse has qualified under regulation 13 he can seek crowdfunding as an option to
raise capital