January 27

Press Release: USD 127 Million Social Impact Securitization Vehicle for off-Grid Solar Sector in Kenya

Solar Frontier Capital Limited (SFC), a wholly-owned subsidiary of African Frontier Capital (Mauritius) LLC (AFC), d.light design Inc. (d.light), a leading global innovator of solar energy products and Norfund, the Norwegian Investment Fund for Developing Countries, have jointly announced the expansion of Brighter Life Kenya 1 Limited (BLK1). The expansion sees Norfund join the United States International Development Finance Corporation (DFC), who acted as the original cornerstone senior lender, in the structure as a co-senior lender.

BLK1 is an off-balance sheet financing vehicle that is dedicated to acquiring pay-as-you-go (PAYGO) Solar Home System (SHS) accounts receivables from d.light’s Kenyan subsidiary, d.light Limited (d.light Kenya). It has been set up to provide the company with flexible, working capital to finance its continued growth. As a social impact venture, the newly expanded BLK1 is expected to finance the provision of:

▪ improved energy access and financial inclusion to 1.9 million people living off-grid in Kenya;

▪ The creation of USD 88 million of additional income for the Kenyan economy and its consumers; and

▪ Over 600,000 tons of greenhouse gases saved.

BLK1 has been structured to provide d.light Kenya with local currency financing (up to the Kenyan Shillings equivalent of ca. USD 127 million in face value of receivables purchased ) over a two year commitment period and is intended as the first in a series of vehicles designed to provide d.light with continuing access to sustainable and affordable local currency receivable financing.

Part of BLK1 is being financed by a senior debt facility with USD 20 million of commitments from DFC and USD 15 million from Norfund . SFC acts as the subordinated lender and the master servicer under the transaction and, more generally, as sponsor of the structure.

Photo courtesy of Karsten Würth.

Source: African Frontier Capital (link opens in a new window)

Energy, Finance
financial inclusion, impact investing, off-grid energy