OPIC commits $25 million through Sunfunder to expand access to off-grid power in Africa and Asia
The Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, has committed $25 million in financing to the Solar Energy Transformation Fund LLC, which will provide loans to companies developing off-grid solar products and solutions for the millions of people in Sub Saharan Africa and Asia who lack access to electricity.
The Solar Energy Transformation Fund is managed by SunFunder, a solar energy finance business working to make off-grid solar lighting and energy solutions more widely available in developing countries. Solar power is an effective way to bring cleaner and more affordable electricity to people who live in remote areas that are not connected or have unreliable connections to central electricity grids.
The OPIC commitment consists of both a senior and a subordinated tranche, which will help catalyze other impact-focused investors to achieve a target fund size of $85 million. SunFunder projects that the Solar Energy Transformation Fund will make individual loans to more than 50 off-grid solar companies, which in turn will enable more than three million people to gain access to clean, affordable energy and lighting.
“OPIC’s support of this project advances several agency priorities,” said OPIC President and CEO Ray W. Washburne. “In addition to supporting projects that improve lives of poor people in developing countries, OPIC, through the 2X Women’s Initiative, is committed to supporting women-owned and women-led businesses like SunFunder.”
SunFunder was founded in 2012 by Ryan Levinson and Audrey Desiderato, with a commitment to provide financing to emerging market off-grid solar businesses to meet their working capital, construction, inventory finance and structured finance needs.
“OPIC’s innovative participation in both the senior and subordinated tranches is highly catalytic for the energy access industry,” said Desiderato. “Their commitment is key to unlocking private capital into the SET Fund which will enable SunFunder to more rapidly meet solar companies’ growing demand for debt capital, which includes commercial and industrial projects that require longer tenor five to seven year funding.”
By introducing electricity to some of the hardest to reach communities in Africa, these projects advance the U.S. Power Africa initiative to bring electricity to more of the hundreds of millions of people in Sub-Saharan Africa who live without power.
OPIC previously committed $15 million in financing and $10 million in political risk insurance to another fund managed by SunFunder, the Beyond the Grid Solar Fund, which provides financing for off-grid companies located in Africa, India, and the Pacific Islands. To date, the Beyond the Grid Solar Fund has provided loans to 16 off-grid solar companies, which have helped bring electricity to 1.55 million people.
Photo courtesy of Karsten Würth.