The Industrial Development Corporation (IDC) of South Africa offered WiSolar a $1.5 million loan, but the green power company turned it down.
The company chose it because it thought the loan terms were terrible and could hurt its goal and growth.
The South African company WiSolar is one of the first digital solar companies. It specializes in on-demand solar options for home users. The 2016-founded company is famous for its unique power purchase agreement (PPA) business plan, which lets homeowners use solar power without paying anything upfront.
IDC is a South African development finance institution that the government funds. Its goal is to help the country’s economy grow and its industries improve. To reach these goals, the IDC uses different types of financing, like loans, equity, quasi-equity, guarantees, trade finance, and venture capital, to help entrepreneurs and businesses get the money they need to improve their industrial capabilities.
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IDC’s faulty $1.5 million loan
The loan offer from the IDC was made as part of the company’s energy protection plan, and the last payment date is March 31, 2025. The term is ten years, and monthly capital return and annuity payments must be made from the draw date.
WiSolar turned down the loan offer for many essential reasons. The company’s main complaint was that the loan terms did not match its goal and did not consider other important people in its value ecosystem. WiSolar says that the relationship between the startup and its backers was condescending and disrespectful to the team’s founders and execs.
WiSolar was also worried about the loan’s excessive disclosure requests, which they thought could lead to the public disclosure of private trade secrets. The business also said that the loan terms didn’t take into account the time or interests of other stakeholders.
The CEO and founder of WiSolar, Tonye Irims, expressed disappointment with the choice, stating, “Our experience leaves a lot to be desired.” In a country with such a high unemployment rate, social impact, non-legacy business growth, green energy job creation, and skills training for youngsters, women, and persons with disabilities would be expected.
Irims added, “Lack of funding continues to be the biggest reason for talent flight and unhygienic job creation in Africa. Entrepreneurs must seek capital that matches their goals. Any money that bullies or changes the company’s goal must be boldly rejected.”
WiSolar’s refusal of the IDC loan shows the necessity of matching funding alternatives to a company’s principles, mission, and goals.
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About WiSolar
WiSolar is a digital solar company based in South Africa, specializing in on-demand solar solutions for residential users. WiSolar was started in 2016 and is famous for its unique power purchase agreement (PPA) plan, which lets homeowners get solar power without having to pay for it all at once. The company’s primary goals are to support green energy, create jobs, and teach skills, focusing on neglected groups.