SunCulture, a photo voltaic irrigation firm headquartered in Nairobi, Kenya, has received the first disbursement from a brand new US $11m syndicated debt facility to expand its operations in sub-Saharan Africa.
The new loan is groundbreaking for the productive use photo voltaic sector due to its measurement and its innovative combination of working capital and end-user financing.
Arranged by SunFunder, the co-investors in the facility are Nordic Development Fund; Triodos Investment Management, by way of its Hivos-Triodos Fund; SunFunder by way of its Solar Energy Transformation Fund; AlphaMundi via both its SocialAlpha and AlphaJiri Investment Funds; and the AfDB’s FEI OGEF managed b Lions Head.
This will allow SunCulture to scale up renewable vitality installations at smallholder farms and households that ill mitigate over 20,000 tons of CO2 yearly as farmers exchange diesel pumps with solar ones while facilitating earnings development and job alternatives in rural communities.
SunCulture has pioneered a Pay-As-You-Gro business model to make solar-powered irrigation inexpensive for smallholder farmers in sub-Saharan Africa, combining end-user finance, value-added services, trendy local weather technology, and access to enhance productivity. A current report developed b Dalberg Research reveals that irrigation techniques and solar-powered water pumps can improve farmers production between 2 and four times, and their income between 2 and 6 instances.
READ: SunCulture to distribute solar-powered water pumps throughout Africa
Samir Ibrahim, Chief Executive Officer at SunCulture, mentioned: “The previous 12 months was devastating for the millions of smallholder farmers in Kenya; 87% are in a worse monetary position because of the pandemic. 81% of SunCulture farmers, nonetheless, were able to enhance their income from farming in 2020. Solar irrigation helps create food security and sovereignty, and it also helps raise folks out of poverty. This facility further permits our efforts to support farmers by offering them with extra of our solar options, and faster.”
Jemimah Kwakye-Fosu, Investment Officer, who led the transaction for SunFunder, stated: “We are delighted to have led this syndicate of proactive lenders who labored nicely collectively for a standard aim: to help SunCulture attain man extra farmers. It reveals how working capital could be combined with finish user financing, which is crucial for making productive use applied sciences reasonably priced.”
Surabhi Mathur Visser, Head of Investments at SunFunder, said: This is a pioneering transaction that demonstrates how productive use applied sciences like solar irrigation could be scaled up. SunFunder organized this facility with a similar-minded group of lenders to help an innovative product and business model. We look ahead to seeing SunCulture develop in Kenya and ne markets.
Karin Isaksson, Managing Director at NDF, said: “This loan to SunCulture is the second prolonged to an organization graduating from the EEP Trust Fund managed by NDF. It is a clear demonstration that we are ready to ship on the brand new NDF Strategy and its dedication to provide flexible and scalable financing in addition to catalytic influence. It has all of the components that outline NDFs added worth in the climate financing panorama. It demonstrates our capability to convene and mobilise further financing, in addition to our unique mi of financing instruments to match the needs of our partners, public or private. Up-sell are proud to be standing with our partners and supporting the emergence of a greener economy, precisely presently of COVID-19.
Since our first investment in 2019, SunCulture has made big strides to unlock the potential of smallholder agriculture via revolutionary products and shopper credit. FEI-OGEF is pleased to find a way to refinance our inventor mortgage into this new working capital facility and proceed that development alongside a dedicated and constructive group of lenders, famous Harr Guinness from Lions Head.
READ: SunCulture companion with Togo to speed up entry to sustainable solar-powered farming
Judith Santbergen, Senior Investment Manager at AlphaMundi, stated: “Since 2018, AlphaMundi has successively offered help to SunCulture by way of a combination of technical help and debt funding. We are excited to proceed and increase our funding in the firm by way of this new, revolutionary working capital facility.
Sjoerd Melsert, Senior Investment Manager at Triodos Investment Management, stated: “SunCulture is a good example of an revolutionary firm that is energetic on the nexus of renewable power and agriculture, using photo voltaic vitality to increase farmers’ incomes. Our facility supports the additional progress of SunCultures pay-as-you-go photo voltaic portfolio, resulting in a more 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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