Sun King targets next growth phase after $156m securitisation

Earlier this year, solar energy provider Sun King closed a $156m securitisation deal to accelerate the rollout of off-grid solar systems in Kenya. 

Patrick Walsh, co-founder and CEO of the Benin-headquartered firm, says the debt-financed deal highlights the growing appetite of Kenyan and regional financial institutions in supporting Africa’s fast-maturing clean energy ecosystem.

Commercial banks ABSA, Citi, the Co-operative Bank of Kenya, KCB Bank and Stanbic Bank Kenya supported a senior tranche, while a mezzanine tranche was supported by development institutions British International Investment, the Netherlands’ FMO, and Norway’s Norfund.

This $156m securitisation is part of Sun King’s broader effort to raise local currency capital across Africa. So far, Sun King has raised $450m across Kenya, Nigeria, and Tanzania, including a 2023 securitisation of $130m.

“Local currency financing is critical – it allows us to provide affordability and security to the end user”, Walsh told African Business.

Pay-as-you-go model

The firm offers a range of solar services from budget solar lanterns to home and business systems and multi-kilowatt-scale solar systems that replace the electric utility.

Sun King’s pay-as-you-go solar model allows households to access solar products by making small, flexible payments starting from $0.19 (KES 25) per day through mobile money.

The new securitisation is expected to deliver loans that will enable the purchase of approximately 1.4 million solar products and smartphones in Kenya. Together with Sun King’s 2023 securitisation, the two transactions will help deliver an estimated 3.7 million solar products and smartphones.

Sun King says it has extended $1.3bn in solar loans to almost 10 million individual customers across Africa. It works through a network of over 34,000 field agents who sell, install and service its products.

“We are the largest distributor of solar energy solutions in Africa, focused on people who either don’t have electricity or rely on unreliable power”, says Walsh.

With operations in 11 African markets so far (Benin, Cameroon, Kenya, Malawi, Mozambique, Nigeria, Tanzania, Togo, Uganda, South Africa and Zambia), the company has plans for further expansion.

“We want to make sure everybody on the continent has access to these products,” Walsh says. That means scaling in new regions, rolling out larger solar systems and appliances, and deepening ties with local banks to secure affordable financing.”

Anish Thakkar, co-founder of Sun King, said the deal showed that commercial banks are increasingly open to investing in African solar projects. 

“It shows that African commercial banks believe in the power of pay-as-you-go solar and are ready to back it with serious capital. Return-seeking, local capital in local currency is essential to unlocking the scale and speed needed to achieve universal energy access.”