Sun King, a prominent solar energy solutions provider in Africa and Asia, continues its impressive growth trajectory with another significant development. Following its recent acquisition of PayGo Energy, Sun King is proud to announce a groundbreaking partnership with Citi to spearhead an unprecedented bank-led securitisation deal denominated entirely in Kenyan Shillings. This remarkable $130 million initiative aims to leverage the payments made by Sun King’s existing and future Kenyan customers for solar products, raising funds to drive further growth and expansion in the off-grid solar energy sector.
Citi, acting as the lead placement agent, arranged and structured the scalable loan instrument, with support from Standard Bank Group as the co-placement agents. The transaction garnered participation from prominent development finance institutions and commercial lenders across six countries, facilitating broader access to finance for Kenyans seeking to purchase green and affordable solar systems.
The four-year securitisation deal, issued under Sun King’s new Sustainable Financing Framework, is specifically structured around the credit Sun King extends to its Kenyan customers, allowing them to conveniently pay for solar products through affordable instalments. The primary objective of this transaction is to expedite the adoption of clean and reliable energy solutions for Kenyan families and businesses.
Statistics from World Bank Global Electrification Database shows that approximately 30% of Kenyans currently live without access to electricity, relying instead on dim and smoky kerosene lanterns or smog-emitting gas generators, which can consume 5 to 10% of their income. Solar energy presents a cleaner and more dependable alternative, with long-term cost savings for households and enterprises. However, the upfront cost of solar equipment has been a significant barrier hindering the transition to solar energy for many Kenyan consumers.
Sun King specialises in designing, distributing, installing, and financing solar energy solutions for households and businesses that lack access to traditional electric grid connections in Africa and Asia. Through the company’s “Easy Buy” model enabled by technology, customers can purchase solar products and make affordable payments in instalments as low as $0.15 per day, using mobile money or cash. Notably, over half of Sun King’s registered pay-as-you-go customers in Kenya are women, many of whom are accessing formal financing products for the first time.
The securitisation structure enables investors to finance the pooled expected future payments from over a million Sun King customers. This approach not only connects unbanked or underbanked customers with the necessary finance to acquire solar assets but also provides investors with access to a steady yet underserved market, offering risk-diversified returns.
Sun King has successfully raised the securitisation funds using its Sustainable Financing Framework, which has received a Very Good Sustainable Quality Score (SQS) from Moody’s Investor Relations following a Second Party Opinion (SPO) assessment. The framework, facilitated by Citi, outlines Sun King’s commitment to integrating sustainability considerations into its financial instruments, enhancing access to clean energy and contributing to the achievement of the United Nations’ Sustainable Development Goals.
This landmark securitisation deal involves the participation of both commercial and development finance institutions, including ABSA Kenya, British Investment International, Citi, FMO, Norfund, Stanbic Kenya, and the Trade and Development Bank. Citi served as the sole arranger, primary placement agent, security agent, facility agent, cash manager, sustainability structuring bank, and secured accounts bank, while Standard Bank Group acted as the co-placement agent.
Anish Thakkar, Co-Founder of Sun King, expressed his enthusiasm for the transaction, stating, “Over one billion people live without a reliable electric grid, and this number is projected to rise. Sun King’s proven pay-as-you-go service dismantles the up-front cost barrier that blocks consumers from purchasing solar energy systems. This securitisation could be key to unlocking the extensive capital needed to fund solar energy initiatives at the scale the climate crisis requires.”
Manolo Falco, Global Co-Head of Investment Banking at Citi, commended the collaboration, saying, “Sun King has been an important client for many years, and we are pleased to support them with this catalytic transaction. Our unrivalled global network and track record for delivering innovative sustainable finance solutions position us perfectly to develop local sustainable financial infrastructure from the ground up. This first-of-its-kind deal originated from Citi’s Social Finance division, which supports socially conscious companies worldwide, and was delivered in conjunction with our leading Financing and Securitisations team.”
Rentia van Tonder, Global Head of Power at Standard Bank, highlighted the significance of the transaction and Standard Bank’s commitment to sustainable growth in Africa’s renewable energy sector. She stated, “Africa is well positioned to benefit from the green economy, and we are proud to have partnered with Sun King to facilitate this landmark transaction. Our clients are increasingly focused on transitioning to net-zero and accelerating renewable energy as a core value proposition. Therefore, sustainable finance has become a priority to unlock growth across African economies. As the largest bank on the continent, we possess the local knowledge and a unique opportunity to play a leading role in realizing the possibilities presented by Africa’s longer-term structural trends.”
This securitisation deal sets a precedent for future African securitisation transactions and diversifies funding sources for Kenya’s off-grid solar energy sector. By connecting investors with the future payments of Sun King’s customers, the transaction creates opportunities for underserved markets while advancing the goals of energy access, social development, and climate action.
