SunCulture, a solar irrigation company headquartered in Nairobi, Kenya, has obtained the first disbursement from a new US $11m syndicated debt facility to increase its operations in sub-Saharan Africa.
The new mortgage is groundbreaking for the productive use photo voltaic sector due to its dimension and its revolutionary mixture of working capital and end-user financing.
Arranged by SunFunder, the co-investors in the facility are Nordic Development Fund; Triodos Investment Management, through its Hivos-Triodos Fund; SunFunder via its Solar Energy Transformation Fund; AlphaMundi through both its SocialAlpha and AlphaJiri Investment Funds; and the AfDB’s FEI OGEF managed b Lions Head.
This will enable SunCulture to scale up renewable vitality installations at smallholder farms and households that ill mitigate over 20,000 tons of CO2 annually as farmers exchange diesel pumps with photo voltaic ones while facilitating revenue development and job alternatives in rural communities.
SunCulture has pioneered a Pay-As-You-Gro enterprise model to make solar-powered irrigation affordable for smallholder farmers in sub-Saharan Africa, combining end-user finance, value-added services, trendy climate technology, and access to improve productivity. A latest report developed b Dalberg Research exhibits that irrigation systems and solar-powered water pumps can improve farmers manufacturing between 2 and four occasions, and their earnings between 2 and 6 instances.
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Samir Ibrahim, Chief Executive Officer at SunCulture, stated: “The previous yr was devastating for the tens of millions of smallholder farmers in Kenya; 87% are in a worse financial place due to the pandemic. 81% of SunCulture farmers, nevertheless, had been able to improve their income from farming in 2020. Solar irrigation helps create meals safety and sovereignty, and it additionally helps carry folks out of poverty. This facility further enables our efforts to assist farmers by offering them with more of our photo voltaic options, and quicker.”
Jemimah Kwakye-Fosu, Investment Officer, who led the transaction for SunFunder, stated: “We are delighted to have led this syndicate of proactive lenders who worked nicely collectively for a standard goal: to assist SunCulture reach man extra farmers. It reveals how working capital can be mixed with end user financing, which is essential for making productive use technologies inexpensive.”
Surabhi Mathur Visser, Head of Investments at SunFunder, mentioned: This is a pioneering transaction that demonstrates how productive use technologies like photo voltaic irrigation could be scaled up. SunFunder arranged this facility with a similar-minded group of lenders to assist an innovative product and business model. We sit up for seeing SunCulture grow in Kenya and ne markets.
Karin Isaksson, Managing Director at NDF, mentioned: “This mortgage to SunCulture is the second prolonged to an organization graduating from the EEP Trust Fund managed by NDF. It is a transparent demonstration that we can ship on the model new NDF Strategy and its dedication to supply versatile and scalable financing in addition to catalytic impression. It has all the elements that outline NDFs added worth within the local weather financing panorama. It demonstrates our capability to convene and mobilise extra financing, as well as our unique mi of financing instruments to match the needs of our companions, public or personal. We are proud to be standing with our partners and supporting the emergence of a greener financial system, precisely at this time of COVID-19.
Since our first funding in 2019, SunCulture has made huge strides to unlock the potential of smallholder agriculture via revolutionary products and shopper credit. FEI-OGEF is pleased to be able to refinance our inventor loan into this new working capital facility and continue that progress alongside a dedicated and constructive group of lenders, noted Harr Guinness from Lions Head.
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Judith Santbergen, Senior Investment Manager at AlphaMundi, stated: “Since 2018, AlphaMundi has successively supplied support to SunCulture by way of a mixture of technical assistance and debt funding. We are excited to proceed and enhance our funding in the firm via this new, revolutionary working capital facility.
Sjoerd Melsert, Senior Investment Manager at Triodos Investment Management, stated: “SunCulture is a great example of an progressive firm that’s energetic on the nexus of renewable energy and agriculture, using photo voltaic energy to increase farmers’ incomes. Our facility supports the further development of SunCultures pay-as-you-go solar portfolio, resulting in a extra sustainable and higher production for smallholder farmers, which is full aligned with the mission, ambition and activities of Hivos-Triodos Fund.”
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