Solar Power Provider Sun King Secures Gigantic $156 Million Agreement to Enhance Solar Power Availability in Kenya
In a significant stride towards providing clean energy to millions of households and businesses across Africa, Sun King, a leading solar energy provider, has closed a KES 20.1 billion ($156 million) securitisation deal. This transaction, the largest in Sub-Saharan Africa outside South Africa, marks a major step in scaling up affordable, clean energy across the continent using pay-as-you-go (PAYG) models.
The innovative financing mechanism converts future customer repayments on PAYG solar loans into investable assets, enabling Sun King to raise large amounts of long-term local currency debt. This financial innovation has attracted both commercial banks and development finance institutions as investors, providing substantial capital to scale operations.
The securitisation is denominated in Kenyan Shillings (KES), reducing foreign exchange risk and aligning financing with local economic conditions. This local currency focus increases investor confidence and sustainability of funding for the PAYG solar business model.
Sun King’s PAYG solar products allow customers to make flexible, small daily payments (as low as $0.19 or KES 25) via mobile money platforms. This accessible payment model enables low-income households to afford clean energy for the first time.
The securitisation is specifically aimed at providing electricity access to an estimated 1.4 million low-income Kenyan households and businesses that often previously relied on expensive and polluting fuels like kerosene and diesel, addressing critical energy poverty.
The deal is backed by a consortium of international and local commercial banks plus development finance institutions, ensuring a blend of commercial rigor and developmental impact focus to support scaling. Sun King has a history of successful securitisation deals, having extended $1.3 billion in solar loans to nearly 10 million customers across Africa, demonstrating the viability and scalability of the PAYG model supported by such financing.
According to Jorge Rubio Nava, Citi's Global Head of Social Finance, the securitisation demonstrates the effectiveness of pay-as-you-go business models to reach underserved communities at scale. Anish Thakkar, Co-Founder of Sun King, stated that the deal signifies a significant turning point for green energy finance in Africa.
Mobilising local capital is crucial to achieving the target of connecting 300 million Africans to electricity, as mentioned by experts. This deal, therefore, is a testament to the belief in the power of pay-as-you-go solar and the readiness of African commercial banks to back it with serious capital, as stated by Anish Thakkar.
The transaction does not include any advertisements and is rated privately and issued under Sun King's Sustainable Financing Framework, which received a Very Good (SQS2) score from Moody's. The development finance institutions include British International Investment, FMO (Dutch), and Norfund (Norwegian). The commercial banks include Absa, Citi, Co-operative Bank, KCB, and Stanbic.
The securitisation supports Kenya's push for near-universal electricity by 2030, which aligns with Mission 300 - a World Bank and AfDB-led goal to connect 300 million Africans to electricity. This deal, thus, is a significant step towards achieving this mission and bringing clean, affordable energy to millions of homes and businesses across Africa.
- This securitization deal, rated privately and issued under Sun King's Sustainable Financing Framework, is a significant step in the field of environmental science, as it leverages technology to provide clean energy to millions via pay-as-you-go (PAYG) models in the general news sector.
- The financing mechanism, which attracts both commercial banks and development finance institutions, such as British International Investment, FMO (Dutch), and Norfund (Norwegian), demonstrates the potential for impactful investments in science and technology, particularly in the realm of finance.
