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Stanbic and other investors participate in largest commercial debt facility

Anna Lyudvig
Oct. 25, 2017, 10:38 p.m.
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South Africa-based Stanbic Bank has led a $55m local currency equivalent debt facility and has committed $9m to M-KOPA Solar, a pay-as-you-go energy provider to off-grid homes.

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South Africa-based Stanbic Bank has led a $55m local currency equivalent debt facility and has committed $9m to M-KOPA Solar, a pay-as-you-go energy provider to off-grid homes.

Stephen Lovell, Head: Corporate Financing Solutions – East Africa, Stanbic, said: “We are excited to partner M-KOPA, the leader in pay-as-you-go off grid power in Africa. Off-grid solutions are set to become a much bigger source of supply – as technology and funding mechanisms become more accessible.” 

“Through this innovative debt financing solution, which is the largest of its kind, the company is able to fund the next wave of pay-as-you-go installations across East Africa. We are proud to be a part of this landmark transaction and the positive impact it will have on lives and communities,” he said.

Overall, M-KOPA Solar has secured $80m of committed financing.

The lending syndicate also included CDC, FMO and Norfund, which provided $20m, $13m and $13m respectively. 

The financing is in Kenya Shillings and Uganda Shillings and will be backed by customer receivables, paid over mobile money payment plans.

Kjell Roland, CEO, Norfund, says: “Increased access to energy is crucial for development and poverty reduction. Investments in clean energy projects, large-scale power plants as well as off-grid solutions such as M-KOPA, are therefore of high priority for Norfund.”

It is the largest commercial debt facility to date in the pay-as-you-go off-grid energy sector. 

Chad Larson, Chief Credit Officer and Co-Founder, M-KOPA Solar, said: “Stanbic’s team was innovative and flexible in its approach, which allowed the lenders to provide a large line of credit for our receivables.” 

“This record-breaking facility is being deployed primarily into off-grid households, with per capita income of less than $2 per day. Over the past year, Stanbic and M-KOPA have worked collaboratively to design a facility that reliably funds M-KOPA’s growth in local currency, while providing considerable safeguards for the lending syndicate.”
Jesse Moore, CEO and Co-Founder, M-KOPA Solar, added: “CDC’s debt investment comes on the back of it leading our series F equity raise last year.” 

“We’re delighted that Stanbic, Norfund and FMO are also investing. This facility offers lenders the chance to connect low-income homes to power and information – while delivering sustainable returns. It’s part of an emerging trend for development partners and investors to look at more cost effective ways to fund last mile connectivity.”

M-KOPA has also secured $25m in US debt from responsAbility, Symbiotics, and Triodos Investment Management.

The financing will be utilised over the next three years to provide finance for pay-as-you-go solar installations in one million homes – on top of the 500,000 already connected.

To date M-KOPA has connected well over 500,000 homes in East Africa to affordable, safe and clean energy. 

Its predominantly low-income customer base is accessing lighting, phone charging, radio and TV on daily mobile money payment plans that are less than the typical cost of kerosene.

M-KOPA customers now enjoy over 62.5 million hours of kerosene-free lighting per month and they will save over 600,000 tonnes of CO2 over four years. 

Customers who complete their payment plans are upgrading with M-KOPA for more lights, TVs, energy-efficient cooking stoves, smart phones and water tanks. 

The company has sold well over 160,000 upgrade units to date – including 90,000 Solar TVs.

Nick O’Donohoe, CEO, CDC, said: “M-KOPA is a remarkable company that is transforming lives in East Africa by providing affordable energy, financial inclusion and essential products for low-income households. It empowers its customers economically, improves people’s health and reduces greenhouse gas emissions.”

“Our equity and debt investments are aimed at helping the company build on its success and reach many more of the 600 million people across Africa who currently live without electricity.”

Elvira Eurlings, Director Energy, FMO, added: “FMO is very pleased to be part of M-KOPA’s core lender group. This innovative financing will help M-KOPA provide affordable, last mile clean energy solutions to households with no access to the grid in East Africa.” 

“FMO’s support to M-KOPA’s growing receivables base in East Africa fits very well with FMO’s inclusive energy access strategy, which aims to achieve significant development impact for all segments of the population in Africa.”
 

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