Sun King Closes Record $156M Securitisation for Clean Energy

Anish Thakkar, Sun King Co-Founder

Sun King, an off-grid solar energy company, has closed a $156 million (KES 20.1 billion) securitisation to scale affordable solar across Kenya. The local currency deal will enable an estimated 1.4 million low-income households and businesses to access electricity – often for the first time – and shift away from costly, polluting fuels like kerosene and diesel.

This is Sun King’s second and largest Kenyan-Shilling-denominated securitisation. The deal is the largest securitisation ever completed in Sub-Saharan Africa outside South Africa. Arranged and structured by Citi with Stanbic Bank Kenya Ltd (part of the Standard Bank Group) acting as the placement agent, the securitisation is backed by five international and local commercial banks and three development finance institutions.

Sun King’s pay-as-you-go solar model allows households to access solar products by making small, flexible payments starting from as little as $0.19 (KES 25) per day through mobile money. To date, Sun King has extended $1.3 billion in solar loans to almost 10 million individual customers across Africa. The securitisation enables Sun King to raise long-term local currency debt by converting future customer repayments for financed solar products into investable assets.

“Millions of off-grid households have switched to solar thanks to small ‘pay-as-you-go’ loans. This deal signals a major turning point for green energy finance in Africa,” said Anish Thakkar, co-founder of Sun King. “It shows that African commercial banks believe in the power of pay-as-you-go solar and are ready to back it with serious capital. Return-seeking, local capital in local currency is essential to unlocking the scale and speed needed to achieve universal energy access.”

The transaction includes:

• A senior tranche funded by five commercial banks: Absa Bank Kenya, Citi, The Co-operative Bank of Kenya, KCB Bank, and Stanbic Bank Kenya, and

• A mezzanine tranche provided by development finance institutions: British International Investment, FMO and Norfund.

Both senior and mezzanine tranches have been privately rated by a credit ratings agency. The funds are raised under Sun King’s Sustainable Financing Framework, which received a Second Party Opinion (SPO) from Moody’s Investor Relations, earning a Very Good (SQS2) score. The securitisation is a private offer in line with Kenya's capital market regulations.

“This securitisation demonstrates the effectiveness of pay-as-you-go business models to reach underserved communities at scale and the role of development finance institutions to mobilise private capital,” said Jorge Rubio Nava, Citi’s global head of social finance. “Over the last few years, we’ve successfully partnered with Sun King to develop innovative financial tools that bring sustainable and affordable energy solutions to millions of households across Kenya and beyond.”

Source: Africa Private Equity News