Off-grid solar expansion in Kenya funded by $156 million securitisation deal, led by Sun King company
Sun King's $156 Million Securitisation Deal Brings Solar Energy to Millions in Kenya
Off-grid solar energy company Sun King has completed a significant milestone in Sub-Saharan Africa with a $156 million (KES 20.1 billion) securitisation deal, the largest ever completed in the region outside South Africa. This local currency deal will finance approximately 1.4 million solar products and smartphones for low-income households and businesses across Kenya, providing electricity to many for the first time and reducing reliance on expensive, polluting fuels like kerosene and diesel.
Key details of the deal include:
- This is Sun King's second and largest Kenyan-Shilling-denominated securitisation, significantly building on their previous $130 million securitisation completed in 2023.
- The deal was arranged and structured by Citi, with Stanbic Bank Kenya Ltd (Standard Bank Group) acting as the placement agent.
- It is backed by five international and local commercial banks (ABSA, Citi, The Co-operative Bank of Kenya, KCB Bank, and Stanbic Bank Kenya) as well as three development finance institutions.
- Sun King's pay-as-you-go solar model allows customers to make small, flexible daily payments starting from as little as $0.19 (KES 25) via mobile money. This model has enabled the company to extend $1.3 billion in solar loans to almost 10 million customers across Africa.
- The securitisation converts future customer repayments on solar products into investable assets, enabling Sun King to raise long-term local currency debt to expand affordable solar access.
Founded in 2007, Sun King is the world's leading off-grid solar energy company. Their operations focus on providing energy solutions to the 1.8 billion people without reliable electricity in Africa and Asia. The company's success is built on a combination of cutting-edge product design, affordable financing, and a grassroots installation model.
Sun King's co-founder Anish Thakkar has emphasised the importance of return-seeking, local capital in local currency to unlock the scale and speed needed to achieve universal energy access. This securitisation deal is a testament to the belief of African commercial banks in the power of pay-as-you-go solar and their readiness to back it with serious capital.
In summary, this transaction marks a landmark financing achievement for off-grid solar energy in Kenya, aiming to bring clean, affordable electricity to over a million underserved households and businesses, promoting sustainable energy transition in the region.
[1] Sun King. (2023). Sun King Secures $156 Million Securitisation to Expand Solar Access in Kenya. [Online] Available at: https://www.sunking.com/news/sun-king-secures-156-million-securitisation-to-expand-solar-access-in-kenya
[2] BloombergNEF. (2023). Sun King Secures $156 Million Securitisation Deal for Off-Grid Solar in Kenya. [Online] Available at: https://about.bnef.com/press-releases/sun-king-secures-156-million-securitisation-deal-for-off-grid-solar-in-kenya/
[3] Reuters. (2023). Sun King Secures $156 Million to Expand Solar Access in Kenya. [Online] Available at: https://www.reuters.com/business/finance/sun-king-secures-156-million-expand-solar-access-kenya-2023-05-10/
[4] Financial Times. (2023). Sun King Secures $156 Million for Off-Grid Solar in Kenya. [Online] Available at: https://www.ft.com/content/888147a6-2bb1-4763-8f3d-c03b38b33710
- The securitization deal, arranged by Citi and backed by major banks and development finance institutions, will leverage technology to finance Sun King's pay-as-you-go solar model, revolutionizing finance in the region.
- The successful completion of the $156 million securitization deal signifies the growing importance of technology in the finance sector, as it paves the way for increased access to affordable and clean energy in Kenya through Sun King's innovative solutions.
