Africa | January 15, 2019

SunFunder helps SolarNow raise $9 million to finance off-grid customers in Uganda

Roodgally Senatus
ImpactAlpha Editor

Roodgally Senatus

ImpactAlpha, January 14 – Kampala-based SolarNow sells and installs modular off-grid solar systems and appliances to East African households and businesses. Solar financing company SunFunder arranged and supported a $9 million debt round for SolarNow to provide consumer credit for 17,500 of its systems in Uganda. Impact investors Oikocredit and responsAbility are also lenders in the deal.

SolarNow works with 35,000 customers in Uganda and Kenya, many of whom require credit or flexible payment options to be able to purchase SolarNow’s products. The company offers up to two-year financing for its products, and says it has a 97% repayment rate.

For a company like SolarNow to provide consumer credit, it would typically borrow money from other lenders, and then repay those loans as customers pay down their credit balance. In SolarNow’s case, the $9 million was facilitated using SunFunder’s Structured Asset Financed Instrument, or SAFI. With this structure, SolarNow does not take on the financing as its own debt; rather, it sits “off balance sheet” and is used for direct lending to SolarNow’s customers. This allows SolarNow to expand its customer financing—and product sales—while minimizing its own debt and working capital requirements.

The transaction marks SolarNow’s third SAFI from SunFunder and sixth transaction with SunFunder overall. SunFunder, which has provided more than $58 million in debt to solar companies in Africa and Asia, launched its SAFI facility in a $2 million deal with SolarNow in 2016. In October, SunFunder arranged the second, $6 million SAFI for SolarNow, a transaction also backed by Oikocredit and responsAbility.

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