2021 will be remembered as the year of the successful, extraordinary rollout of the COVID-19 vaccine. In less than a year, over 4.5 billion people across the planet had been vaccinated. With an mRNA vaccine that hadn’t existed even a year earlier. It’s an outstanding testimony to the ingenuity, creativity, resilience and scale at which humankind can work when we pull together and rise to the challenge. Yet COVID-19 remained tenacious throughout the year, disrupting supply chains and travel, draining government budgets, and straining organisations, communities and families everywhere. Price inflation and currency devaluation have impacted African economies – in Kenya the shilling devalued against the US dollar and continued a more precipitous decline into 2022.

Within the off-grid market, the prolonged restrictions and economic constraints of COVID-19 worked its way to consumers and resulted in depressed sales. The global pandemic continued to disrupt supply chains causing significant upward cost pressure and stock-outs. LCD’s for TVs, chipsets and battery storage presented particular chokepoints. For the first time, costs of bundled systems bucked the sustained trend of decline seen over the last decade. GOGLA, the off-grid association, reported a 4% decline in global sales.

Fortunately,ourportfoliocompanieswereabletoraisefollowoncapital. Innovationfrom two of our portfolio companies in developing revenue streams through carbon markets has been transformative in lowering costs to consumers and accelerating product sales. The potential for carbon markets to support enterprise economics in lower income countries is largely untapped, but we feel it has significant potential.

Against this backdrop, KawiSafi welcomed a new staff member: Collins Mwangi joins as our Investment Associate and builds out the full team with 7 professionals. We also made two new investments. Both reflect our strategy for concluding our portfolio construction and complementing our existing firms. The Fund already holds a strong cohort of residential home system energy companies. We identified Sistema.bio for its ability to provide scalable, commoditized high-intensity energy solutions for heating and cooking applications; and its extraordinary management team. We are delighted to catalyze co- investment in Sistema.bio from AXA IM, bringing substantial commercial capital into the market.