dfcu bank and Sawa Energy officials exchanging signed MoU documents
Businesses facing high electricity bills can now access solar power without making an upfront investment under a new partnership between dfcu Bank and renewable energy company, Sawa Energy.
The initiative targets high-energy consumers, including manufacturers, industrial companies and commercial enterprises, with businesses able to access solar systems either through a lease arrangement or by purchasing the equipment, officials said on Sept.2 at dfcu headquarters in Kampala while signing the partnership documents.
The partners say the model is intended to help companies reduce operating costs, improve energy reliability and preserve working capital at a time when rising electricity expenses are putting pressure on business margins.
Kate Kizza, dfcu’s Executive Director and Chief Corporate and Institutional Banking Officer, said the cost of electricity had become a growing concern for businesses operating in an increasingly competitive market.
“One of the issues that we’ve had in the country is the rising power costs,” Kizza said, noting that the challenge was becoming more significant as competition among businesses intensified.
She said removing the initial capital requirement is one of the key attractions of the arrangement because companies can begin using solar power without committing large amounts of money to purchasing and installing the system.
“The biggest sweetener I need is zero outlay on the capital cost,” Kizza said.
Easing capital pressure
For businesses, the partnership is not only about switching to renewable energy but also about how money is allocated within the company.
Margaret Karume, dfcu’s Executive Director and Chief Credit Officer, said businesses often have substantial amounts of working capital tied up in meeting energy requirements.
“The partnership with Sawa Energy is actually going to unlock that capital commitment, the cash flows that are tied up in working capital in financing energy,” Karume said.
The arrangement can therefore allow companies to redirect funds that would otherwise be committed to energy infrastructure towards other areas such as production, inventory, expansion and other operational requirements.
Karume said customers can benefit from a long-term energy solution without locking up their working capital.
“Customers can immediately benefit from a long-term energy outlay without actually locking up their working capital,” she said.
She added that the initiative reflects a broader approach by dfcu to provide financing solutions that address practical challenges businesses face rather than focusing solely on conventional banking products.
“Ultimately, it’s more than solar energy. It’s about helping businesses deploy capital more efficiently, operate more competitively and also pass on those benefits to customers and also to the bottom line,” Karume said.
Flexible ownership
Allan Okello, Sawa Energy Country Manager, said the programme is aimed at creditworthy businesses with significant energy requirements that want to reduce costs, improve reliability or transition towards cleaner energy.
“We’re looking at any high energy consumer that’s an industrial client or manufacturer or commercial that is credit worthy, that is looking forward to either going green or having savings or reliability,” Okello said.
Under the arrangement, a business can choose to own the solar equipment or use a lease model.
The leasing option allows a company to access and use the system without bearing the full capital cost at the beginning. Businesses can subsequently acquire ownership of the asset under the agreed arrangement.
Okello said the model gives companies an opportunity to use solar technology, assess its benefits and gain confidence in the system without first committing significant capital.
Businesses can also work with an energy partner to manage the system on their behalf.
The solar equipment supplied by Sawa Energy uses tier-one equipment backed by a 30-year warranty, according to Okello.
The partnership also seeks to address one of the common limitations of solar power — availability beyond daylight hours.
Okello said solar installations can be combined with battery storage for businesses requiring electricity outside normal sunshine hours.
Such systems can also reduce dependence on diesel generators, potentially helping companies lower energy costs while reducing emissions.
Another feature of the solution is the availability of data showing the amount of carbon dioxide emissions avoided through the use of renewable energy.
Okello said such information would become increasingly important as companies pay greater attention to environmental, social and governance considerations.
“Having access to this data is very critical for ESG going forward, and this is a way for them to know the impact that their businesses actually have,” he said.
Energy and growth
The partnership comes against a backdrop of increasing demand for reliable energy as Uganda seeks to expand industrial and commercial activity.
Okello said access to sufficient energy remains essential to Uganda’s economic development and its ambition to attain middle-income status.
“Energy is a requirement for development. And for us to become a middle-income country, we need the requisite amount of energy,” he said.
For businesses, the financing model can therefore provide an alternative way of meeting energy needs while preserving scarce capital for core operations.
Kizza said dfcu will support customers interested in either leasing or purchasing solar equipment.
“At dfcu, we believe we have solutions to our clients that address real problems, not emerging problems,” she said.
