Emerging and Growth Markets | April 28, 2022

Sun King scores $260 million to ramp up off-grid solar access in Africa

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, April 28 – The off-grid solar sector in Africa is growing up.

Sun King, launched (as Greenlight Planet) in Chicago 15 years ago, was one of the earliest makers and distributors of solar lanterns and solar home systems for Africa. The company has stuck to a “direct to consumer” model, selling its products on a pay-as-you-go basis via 15,000 field agents in 40 countries.

The company has raised a $260 million Series D round led by General Atlantic’s climate investing arm, BeyondNetZero. M&G Investments and ARCH Emerging Markets Partners also participated.

Sun King’s Patrick Walsh said the funding allows the company to scale up “so we can meet the needs of the next billion energy consumers.”

Sun King’s products are often the first step on the energy-access ladder for low-income Africans. Solar lanterns are the “backbone of the sector,” accounting for more than 60% of all off-grid solar products, according to the Global Off-Grid Lighting Association. Lantern sales grew through the COVID-19 pandemic, while solar home systems dipped and energy access declined overall.

Sun King says its products have impacted more than 82 million people, saved consumers $4.4 billion in energy costs and eliminated 22 million tons of carbon dioxide.

Commercial capital

Most off-grid solar companies were built with impact capital. The latest example: Swedish government-backed Beyond the Grid Fund for Africa invested $2.5 million in Oolu to expand home solar sales in Burkina Faso.

Now, mainstream private equity and venture capital investors are pouring in growth financing. Mitsubishi and French utility Engie invested in BBOXX’s Series D round in 2019. Zola Electric raised a $90 million round in September, led by TotalEnergies Ventures. Generation Investment Management backed M-Kopa’s venture round in March.

The acceleration of commercial capital has raised concerns that companies are being pushed to grow too fast or to move upmarket and away from low-income customers.

Solar consolidation

U.K.-based BBOXX is in talks to acquire Ghana-based PEG.

PEG, launched in 2013, sells pay-as-you-go solar systems to energy poor households in Ghana, Cote d’Ivoire and Senegal. Half its customers earn less than $3 per day; more than 80% had no access to grid energy or credit. PEG has expanded into new products, like solar irrigation pumps, and new business lines, like providing solar systems for rural health clinics.

BBOXX’s products and services reach 2.5 million people in 11 countries. The acquisition would expand its presence in West Africa.

A spokeswoman for BBOXX declined to comment.