Clean Energy | May 31, 2023

Sun King raises $130 million through securitization of off-grid solar payments

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, May 31 – Public agencies and private companies from California to Cote d’Ivoire are leveraging cash flows to finance climate adaptation and green initiatives. Social enterprise Sun King has struck a deal to securitize $130 million in current and future customer payments for its solar products.

The debt financing is denominated in Kenyan shillings and backed by British International Investment, Stanbic Bank Kenya, Citi and other development finance and banking institutions.

“This securitization could be key to unlocking the extensive capital needed to fund solar energy initiatives at the scale the climate crisis requires,” said Sun King’s Anish Thakkar.

BII and Stanbic separately provided Sun King with $20 million in working capital. 

Sun King’s solar lanterns, home systems and other products reach more than 100 million people. Its latest financing follows last year’s $260 million Series D equity round and $10 million green bond issue. Last month, Sun King acquired pay-as-you-go cookstove venture PayGo.

Scalable opportunity

Low-income customers and small businesses in emerging markets are underserved by traditional banks. Mobile money and financial technologies are providing insights into borrowers’ buying and spending patterns, as well as their credit profiles, accelerating cost-efficient access to finance. Now banks want in.

“Segments of the population that were difficult to reach and unviable commercially in the past, now — because of technology — are feasible to serve at scale,” Citi’s Jorge Rubio Nava told Bloomberg.

Banks are leaning into the commercial and impact opportunity of serving emerging market customers. Citi expects an uptick in sustainability-driven securitizations in emerging markets. Standard Bank this month led a $200 million round of debt for solar and financial services provider M-KOPA; repayment terms include impact incentives. African banks, including Standard and Absa, are taking equity stakes in inclusive agtech and enterprise tech companies like Khula, Nomanini and HelloChoice.