Sun King, the world’s leading off-grid solar energy provider, has secured a historic $156 million (KES 20.1 billion) local currency securitisation, marking the largest commercial-bank-backed securitisation in Sub-Saharan Africa outside South Africa.
This transformative deal will expand affordable solar energy access to 1.4 million low-income households and businesses across Kenya, reinforcing Sun King’s mission to deliver clean, reliable energy to underserved communities.
Sun King’s Pay-As-You-Go Solar Model: Empowering Millions
Since its inception in 2007 as Greenlight Planet, Sun King has transformed energy access through its pay-as-you-go (PAYG) model.
This approach allows customers to acquire solar products, ranging from lanterns to multi-kilowatt systems, through affordable daily payments starting at just $0.19 (KES 25) via mobile money.
By eliminating the upfront cost barrier, Sun King has already empowered 10 million customers across Africa to switch from harmful kerosene and diesel to clean solar power, with 30% of Kenyan homes currently benefiting from their products.
Why the PAYG Model Works
- Affordability: Flexible payments make solar energy accessible to low-income communities.
- Scalable Solutions: Products range from small lanterns for lighting and phone charging to larger systems powering appliances like refrigerators.
- Extensive Reach: With 15,000 field agents across 40+ countries, Sun King ensures robust distribution and after-sales support.
The $156M Securitisation: A Game-Changing Financial Structure
This landmark securitisation, arranged by Citi with Stanbic Bank Kenya Ltd as the placement agent, is a pioneering achievement in green energy finance.
It’s the first securitisation in Sub-Saharan Africa to be majority-backed by commercial banks, signalling growing confidence in PAYG solar as a commercially viable and socially impactful investment. Here’s the breakdown:
- Senior Tranche ($125M): Funded by five leading commercial banks, including Absa Bank Kenya, Citi, The Co-operative Bank of Kenya, KCB Bank Kenya, and Stanbic Bank.
- Mezzanine Tranche ($31M): Supported by development finance institutions, including British International Investment (BII), Dutch development bank FMO, and Norfund (Norwegian Investment Fund for Developing Countries).
The funds will finance the distribution of approximately 1.4 million solar products and smartphones, building on Sun King’s 2023 $130M securitisation.
Together, these deals will support 3.7 million solar products in Kenya, bringing the company’s total capital raised through securitisations in the country to $286 million.
“This is a signal to Africa’s financial sector, local banks are not only ready but eager to back inclusive clean energy solutions.”
— Anish Thakkar, co-founder of Sun King
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Impact on Kenya: Lighting Up Lives and Communities
This $156M funding is set to transform lives across Kenya by addressing critical energy access challenges. Here’s how:
1. Expanding Energy Access
Globally, 1.8 billion people lack reliable electricity, with Sub-Saharan Africa accounting for 75% of this population.
In Kenya, Sun King’s efforts align with Mission 300, a World Bank and African Development Bank initiative to connect 300 million Africans to electricity by 2030.
The funding will bring clean energy to 1.4 million additional households and businesses, many of whom will experience electricity for the first time.
2. Reducing Harmful Fuel Use
By replacing kerosene and diesel with solar power, Sun King reduces health risks from toxic fumes and lowers energy costs for families. This shift also contributes to lower carbon emissions, supporting global climate goals.
3. Driving Economic Growth
Access to electricity enables small businesses to extend operating hours, students to study after dark, and families to charge essential devices.
4. Strengthening Local Economies
Sun King’s local currency financing strategy mitigates foreign exchange risks, strengthens domestic capital markets, and ensures more affordable financing for consumers.
The company has raised over $450 million equivalent across Kenya, Nigeria, and Tanzania, showcasing a sustainable model for energy financing.
Why This Securitisation Is a Turning Point
This deal is a key moment for green energy finance in Africa for several reasons:
- Commercial Bank Leadership: The majority backing from local commercial banks demonstrates that African financial institutions are ready to invest in clean energy solutions, reducing reliance on external capital.
- Innovative Financing: By converting future customer repayments into investable assets, Sun King unlocks long-term local currency debt, making their model scalable and sustainable.
- Scalable Impact: With $1.3 billion in solar loans disbursed globally, Sun King is a trailblazer in last-mile energy financing, offering a blueprint for other solar companies like M-KOPA and Bboxx.
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Sun King’s Broader Vision
This securitisation is part of Sun King’s ambitious goal to power the 1.8 billion people worldwide without reliable electricity.
With operations in over 40 countries and 82 million lives impacted globally, the company is expanding its footprint and product offerings. Future plans include:
- New Products: Introducing larger solar systems with AC inverters and potentially bundling smartphones to enhance connectivity.
- Market Expansion: Deepening presence in Kenya and exploring new markets in Africa and Asia.
- Sustainability Goals: Aligning with global net-zero targets by reducing reliance on fossil fuels.
As the company continues to light up lives, this deal offers a scalable model for solving Africa’s energy access challenge sustainably and affordably.
Ronnie Paul is a seasoned writer and analyst with a prolific portfolio of over 1,000 published articles, specialising in fintech, cryptocurrency, climate change, and digital finance at Africa Digest News.
