M-Kopa Solar has announced it has closed its most recent round of funding, raising Ksh1.72 billion to fund expansion of their customer base from the current 50,000 homes to one million by 2018. The funding includes a Ksh 860 million syndicated debt facility fronted by Commercial Bank of Africa (CBA).
The innovative solar system has been making in-roads in off grid households in partnership with Safaricom to provide an affordable 12-month mobile money payment plan.
Jesse Moore, Co-Founder and Managing Director, M-KOPA solar said the system they have deployed makes world class solar systems affordable for low income consumers.
“It’s a model that is also proving attractive to investors. At the heart of our business is our patented technology platform that combines embedded GSM with mobile payments to revolutionize asset financing,” explained Moore.
This financing is a first of its kind in East Africa where CBA and other financiers are banking on M-KOPA’s Solar future cash flow from its customer payment plans as collateral.
“There is very little formal credit or financial information on how off grid households consume and pay for energy. We’re very impressed with M-KOPA Solar’s technology platform, which allows them to extend credit to consumers who are otherwise lacking formal collateral or credit histories. And it is clear that there is an enormous, creditable market that wants to be empowered by cutting-edge energy, telecommunications and financial solutions,” said Jeremy Ngunze, CEO, CBA.
M-KOPA Solar currently offers customers a high quality solar system with three light, phone charging and a solar powered radio – which is backed by a two-year warranty. The system is available for a deposit of Ksh 2,999 followed by 360 daily payments of Ksh 50.
“We’re incredibly proud to have been an anchor partner for M-KOPA Solar and to see this Kenyan success story starting to go global. Our technology, fantastic customers and dealer network have provided a unique environment to scale up the M-KOPA solar model,” said Safaricom CEO Bob Collymore.
Other lenders in M-KOPA Solar’s debt facility include Bill & Melinda Gates Foundation, LGT Venture Philanthropy, Shell foundation, Imprint Capital and Netri Foundation.