NAIROBI, Kenya, Oct 10 – M-KOPA Solar has secured Sh8.2 billion of committed financing for expansion over the next three years.
The credit facility, which is equivalent to 80 million dollars, makes M-KOPA Solar the world’s largest recipient of commercial debt in the pay-as-you-go home solar energy sector.
Stanbic Bank is leading a $55 million (Sh5.6Bn) local currency equivalent debt facility and has committed US$9M (Sh928 million)
Other lenders include CDC ($ 20 million), FMO($ 13 million) and Norfund ($13 million)are part of the lending syndicate.
The debt is in Kenya Shillings and Uganda Shillings and will be backed by customer receivables, paid over mobile money payment plans.
M-KOPA Solar Chief Credit Officer and co-founder Chad Larson has said the debt facility is being deployed primarily into off-grid household. with the aim of doubling the current reach of solar-connected homes to one million.
“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,” says Larson.
To date, M-KOPA has connected well over 500,000 homes in East Africa to affordable, safe and clean energy.
It is predominantly low-income customer base is access in lighting, phone charging, radio and TV on daily mobile money payment plans that are less than the typical cost of kerosene.
The debt facility offers lenders the chance to connect low-income homes to power and information while delivering sustainable returns, says M-KOPA Solar CEO Jesse Moore.
“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. It’s part of an emerging trend for development partners and investors to look at more cost-effective ways to fund last mile connectivity.”