CDC, Norfund, others ink $75-mn sustainable finance deal in Kenya

 CDC, Norfund, others ink $75-mn sustainable finance deal in Kenya

Greenlight aims to reach 10 million households globally in 5 years. Photo credit: CDC

Standard Bank Group, Citi, CDC Group Plc and Norfund have teamed up to provide a $75 million equivalent Kenyan shilling-denominated sustainable finance facility for Greenlight Planet Kenya, an off-grid solar home solutions firm.

This is one of the first sustainability-linked deals in Kenya, and one of the largest syndicated sustainable finance deals in the region to be provided in local currency.

Greenlight Planet co-founder Anish Thakkar said the facility will allow “hundreds of thousands” of off-grid families to make the switch from kerosene to clean and safe rooftop solar energy.

Greenlight Planet Kenya is a group company of Greenlight Planet Inc, which distributes and finances rooftop solar home systems for off-grid and weak-grid homes in Sub-Saharan Africa and South Asia. It has a network of 200 branches and 8,000 field agents, and sells its Sun King-branded solar energy systems directly to clients. It also provides ‘pay-as-you-go’ financing to facilitate their purchase.

The sustainable finance deal comes a year after Greenlight Planet Inc. secured $90 million in debt and equity funding to expand its pay-as-you-go solar consumer financing business and consolidate its debt portfolio. It had raised the capital from CDC, FMO, Norfund, ResponsAbility, SIMA Funds, Symbiotics, Global Partnerships, and private equity firm ARCH Emerging Markets Partners’ Africa Renewable Power Fund.

The latest transaction will allow Greenlight to expand access to solar solutions to off-grid communities throughout Kenya and support its target to reach an additional 10 million households globally in the next five years.

As existing investors in Greenlight Planet, CDC and Norfund’s investments aim to show the long-term viability of the off-grid solar sector and enable the company to scale its operations in Kenya.

Citi served as the sole coordinator on the transaction. Standard Bank acted as sustainability coordinator and executed the forex conversion to facilitate the repayment of the parent loan, in turn aiding local currency funding.

The local currency loan will minimise Greenlight Planet’s exposure to currency exchange fluctuations, allowing the business to focus on growth, employment, and innovation. The deal also includes integrating three sustainability-linked key performance indicators to the funding which covered both social and environmental metrics.

Dentons acted as lenders legal counsel on the deal. Power Africa provided legal advice to Greenlight Planet for this transaction.

Vivek Sinha

The Capital Quest