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KarmSolar powers up expansion plan

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Backed by HSBC’s SME financing and innovative banking solutions, the Egyptian solar utility company aims to make renewable energy the main electricity source in the Arab world.

Ahmed Zahran, co-founder and CEO of Egyptian solar utility company, KarmSolar, is a man on a mission.

“We want to be the company that makes renewable energy the mainstream source of electricity for everyone in the Arab world,” he declared.

And with HSBC’s help, the SME – which invests in power generation, power distribution and power management – is well on its way. Established in 2011, KarmSolar has worked with over 600 clients across a range of industries, from tourism to agriculture, all over Egypt.

“Sometimes our clients are located in places that are far away from the power grid, like the desert, sometimes they’re in touristic areas like the Red Sea coast, and sometimes they’re in urban centres like in Cairo and other major cities,” he said, illustrating the versatility of the business.

Amongst the company’s key achievements are securing their first solar-water pumping project for agri-developers in Egypt’s Western Desert using their own patent-awarded technology, and building the region’s first solar grid in Marsa Alam powering a network of resorts with solar energy.

Financing for SMEs

Like many successful start-ups, KarmSolar’s story began small, in a cafe in downtown Cairo that doubled as their office.

The company faced many challenges in the early years, from a lack of customer awareness of the potential of solar energy to financing. “Renewable energy was quite new in Egypt and there were not a lot of financing options,” Zahran said.

They chose HSBC as their banking partner because of its competitive proposition. “They were able to offer us the best offers in the market in terms of the banking services that they provide,” he explained.

HSBC is committed to working with Egyptian SMEs, offering a range of banking options tailored to support the needs of small and medium businesses, including trade finance, cash management, lending and treasury services.

Creative banking solutions

KarmSolar also benefits from the bank’s expertise and experience in new industries. “When you’re working on a new sector, like renewable energy, there are still a lot of unknowns in terms of how the projects are going to behave over the coming 30 years because those are long-term projects,” Zahran noted.

The HSBC team is innovative and engaged, he said. “You need teams that are capable of devising new ways of dealing with unknowns and coming up with new solutions for whatever financial needs we have.”

The bank is also working with KarmSolar on enhancing the financing mechanisms that are available for utility companies, something that is still challenging in this part of the world, he added.

Sustainability goals

HSBC’s commitment to sustainability aligns with KarmSolar’s own values. “Their position in sustainability and renewable energy matches with what we are trying to do,” Zahran said.

HSBC is implementing plans to become a net-zero bank by 2030, with a goal to reduce financed emissions from its portfolio of customers to net zero by 2050 or sooner. To support customers in their transition to lower carbon emissions, HSBC is aiming to provide up to U.S.$1 trillion of financing and investment globally by 2030.

Making renewables mainstream

Over the next five years, the firm intends to focus on integrating renewable energy into the power distribution business.

“We believe that the power distribution business is going to be key for spreading electricity into different and new places and for allowing customers to be used to getting their main electricity from renewable energy,” Zahran said.

KarmSolar plans to invest heavily in this area in Egypt and other parts of the region, with their expansion plans supported by HSBC’s wide footprint and in-depth local knowledge.

“They will be supporting us by providing information about the legislation in the areas where we are going to be operating, and by advising us on suitable financial solutions in those new areas,” Zahran said.

 

Entering a new market is not an easy thing. It’s a challenge. And you need the right type of partners in order to be able to work in those new markets

Ahmed Zahran | Co-founder and CEO, KarmSolar

Advice for success

Now a seasoned entrepreneur, Zahran’s advice for start-ups centres on three tenets: knowledge, attitude and feedback.

“If you lose two of them, you’re done,” he said. “You have to always make sure that you’re maintaining the three, and you have to focus on feedback to be able to enhance your knowledge and to enhance your attitude.”

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