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Approximately three out of every ten Kenyans live without access to electricity.

East Africa

Sun King raises $130M deal to expand off-grid solar in Kenya

The transaction was arranged by Citigroup, and was supported by various other international financial institutions.

Off-grid solar energy solutions company, Sun King, has closed a first-of-its-kind Kenyan shillings denominated securitisation transaction of US$130 million with leading international finance institutions, which will enable the company to expand access to off-grid solar energy systems in Kenya.

The transaction was arranged by Citigroup, and was supported by various other financial institutions including ABSA Kenya, British International Investment, FMO, Norfund, Standard Bank Kenya and the Trade and Development Bank.

According to Sun King, the investment paves the way for future African securitisation deals and diversifies funding for Kenya’s off-grid solar energy sector. Through the proposed transaction, customers’ future payments for solar products bought on credit will be securitised and funded by investors.

“This securitisation could be key to unlocking the extensive capital needed to fund solar energy initiatives at the scale the climate crisis requires. We applaud Citi for orchestrating this innovative transaction,” said Anish Thakkar, Sun King’s Co-Founder.

“These trailblazing financial mechanisms can convert the global challenges of energy access, social development and climate action into compelling investment opportunities,” Thakkar added.

Improving energy access with off-grid solar in Kenya

Approximately three out of every ten Kenyans live without access to electricity. Many off-grid households devote 5 to 10% of their income to dim, smoky kerosene lanterns or smog-emitting gas generators for light and power. Solar energy offers clean and reliable energy as well as long-term cost savings for homes and businesses, but the upfront equipment cost blocks many Kenyan consumers from transitioning to solar energy.

Sun King designs, distributes, installs and finances solar energy solutions for African and Asian households and businesses who cannot access, rely on or afford traditional electric grid connections. Sun King customers can purchase products using the company’s technology-enabled, pay-as-you-go “Easy Buy” financing service, which breaks payments down into regular, affordable instalments. These payments can be made via mobile money or cash for as little as $0.15 a day. Approximately half of Sun King’s registered pay-as-you-go customers in Kenya are women, the majority of whom access formal financing products for the first time.

Under the securitisation structure, investors are financing the pooled expected future payments from over a million Sun King customers. The structure connects unbanked or underbanked customers to the finance they require to purchase solar assets and provides investors with access to a steady yet underserved market that offers risk-diversified returns.

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