SolarNow, an off-grid solar company based in Kampala, Uganda has closed a funding deal worth US$9 million (about Shs33.6 billion) to expand its operations in Uganda.
According to an official statement, the fund, which is the company’s largest-yet receivables financing facility, will enable SolarNow to deploy 17,500 new off-grid solar systems to customers in Uganda, along with a range of appliances.
The $9m facility, which is SolarNow’s third structured asset finance instrument aka SAFI, was struck with SunFunder, Oikocredit and responsibility.
Speaking on closing this financing round, SolarNow CEO Willem Nolens said: “This syndication and the SAFI structure allow us to minimize the fundraising burden and to focus on our business instead.”
He added: “By selecting the right clients and treating them well, our credit portfolio remains healthy and we create a strong foundation for sustainable growth.”
It also should be noted that last year SolarNow also secured a US$740,000 funding round from Mastercard Foundation to boost its operations in East Africa.
According to the official statement, this investment marks the 5th anniversary of SolarNow’s partnership with SunFunder and it is also the second time that Oikocredit and a responsAbility-managed private debt fund have participated with SunFunder to finance the company, after a similar $6m syndication 14 months ago.
SunFunder’s Director of Investments Surabhi Visser commented: “We have just had our 5-year anniversary working with SolarNow, and this takes us to $19m in investments that we’ve arranged or made directly in the company. We are proud to have backed SolarNow’s growth delivering top quality solar systems and appliances throughout Uganda.”
The new systems will amount to around 2.5MW of new installed off-grid solar capacity, resulting in over 210,000 tons of greenhouse gas emissions avoided through displaced kerosene for lighting.
Among the expected impacts, the company estimates that over 70,000 women will gain improved energy access in Uganda.
Oikocredit’s Renewable Energy Manager David ten Kroode commented: “We’re proud to support the continued growth of SolarNow. Their strategy of offering a wide range of solar products and services to energy-poor communities is perfectly aligned with Oikocredit’s mission to help alleviate poverty by improving access to energy.”
The SAFI product is a tailored receivables financing structure designed by SunFunder for solar companies deploying systems through pay-as-you-go and solar leasing models. SAFI finances their credit offerings directly, allowing them to reach more customers.
The facility is the third syndication arranged by SunFunder with responsAbility and Oikocredit, showing the ongoing importance of specialist origination and collaborative investments for emerging market solar. The three investors also worked on a multi-currency syndicated debt facility for PEG Africa in Ghana and Cote d’Ivoire.
responsAbility’s Stefan Issler, Head of Direct Investments, Energy Debt Financing, added: “We were excited to see SolarNow’s successful growth ever since we teamed up with SunFunder to finance the company a little over a year ago and look forward to supporting SolarNow as a long-term financing partner.”