Circle Gas completes a US$25m acquisition of KOPAGAS technology

KENYA – Circle Gas Limited, a UK holding company, has concluded the acquisition of KopaGas’s proprietary technology in a transaction worth US$25 million. The deal is thought to be the largest-ever pure private equity investment in the clean cooking technology sector. 

The acquisition will enable Circle Gas to gain access to pay-as-you-go (PAYG) technology, advanced manufacturing capabilities and positions in key LPG markets in East Africa

About 900 million people, or 70% of the population of sub Saharan Africa have not yet transitioned to clean and modern cooking fuels such as LPG.

KopaGas designs, manufactures and deploys Internet of Things (IoT) devices and software that enable customers to pay and consume small amounts of gas at a time using mobile wallets such as M-Pesa, whilst providing timely and granular usage and payment information. 

In business since 2014, KopaGas received early financial support from entities including Acumen Fund Inc, HRSV, Saisan Co. and DEG / KFW.

The UK Government Department for International Development (DfID) was critical in encouraging the development of the KopaGas technology, in particular through its involvement in the GSMA Innovation Grant, which the founders of KopaGas, Andron Mendes and Dr Sebastian Rodriguez were awarded in 2015. 

The Circle Gas investment will facilitate energy access for the mass market via the scale-up of the innovative pay-as-you-go technology developed by KopaGas, accelerating its market penetration in East Africa

Through a world-class team, experienced in downstream distribution of LPG, Circle Gas aims to expand the existing business in Tanzania and launch in Kenya in 2020. 

Circle Gas investors include both corporates and individuals and includes the leading Kenyan telecom Safaricom

Safaricom also has a strategic operating agreement with the Circle Gas Kenyan subsidiary M-GAS, covering marketing, technology, and customer service to support and accelerate the growth of the business in Kenya

Mobile money payments in Kenya will be processed using Safaricom’s popular M-Pesa system.

Clean cooking solutions are badly needed throughout the developing world, particularly in Sub-Saharan Africa, where most families use expensive and polluting cooking fuels such as charcoal, biomass and kerosene, every day. 

Cooking with such fuels has serious impacts on the respiratory health of children and women who disproportionately bear the cooking responsibilities. The intense demand for charcoal in urban centres means that forest stocks are not sustainably managed, but rather sacrificed to produce charcoal. 

Today, LPG is a clean cooking solution used globally by over 3 billion people, yet it remains mostly unaffordable in Sub-Saharan Africa. Switching from harvested wood to LPG has profound climate mitigation impacts, as well, reducing net carbon emissions by 67%.

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