SunCulture, a solar irrigation company headquartered in Nairobi, Kenya, has obtained the primary disbursement from a new US $11m syndicated debt facility to broaden its operations in sub-Saharan Africa.
The new mortgage is groundbreaking for the productive use solar sector because of 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, by way of its Hivos-Triodos Fund; SunFunder via its Solar Energy Transformation Fund; AlphaMundi via each 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 annually as farmers exchange diesel pumps with solar ones while facilitating income progress and job alternatives in rural communities.
SunCulture has pioneered a Pay-As-You-Gro business mannequin to make solar-powered irrigation inexpensive for smallholder farmers in sub-Saharan Africa, combining end-user finance, value-added services, trendy climate know-how, and entry to enhance productiveness. A recent report developed b Dalberg Research shows that irrigation techniques and solar-powered water pumps can enhance farmers manufacturing between 2 and 4 times, and their income between 2 and 6 times.
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Samir Ibrahim, Chief Executive Officer at SunCulture, stated: “The previous year was devastating for the tens of millions of smallholder farmers in Kenya; 87% are in a worse financial place because of the pandemic. 81% of SunCulture farmers, however, have been able to increase their income from farming in 2020. Solar irrigation helps create meals security and sovereignty, and it also helps raise people out of poverty. This facility additional allows our efforts to support farmers by providing them with extra of our photo voltaic solutions, and faster.”
Jemimah Kwakye-Fosu, Investment Officer, who led the transaction for SunFunder, said: “We are delighted to have led this syndicate of proactive lenders who labored nicely together for a standard aim: to help SunCulture reach man more farmers. It reveals how working capital can be mixed with end person financing, which is important for making productive use applied sciences affordable.”
Surabhi Mathur Visser, Head of Investments at SunFunder, stated: This is a pioneering transaction that demonstrates how productive use applied sciences like photo voltaic irrigation may be scaled up. SunFunder organized this facility with a similar-minded group of lenders to help an progressive product and business model. We look ahead to seeing SunCulture develop in Kenya and ne markets.
Karin Isaksson, Managing Director at NDF, said: “This mortgage to SunCulture is the second extended to an organization graduating from the EEP Trust Fund managed by NDF. It is a transparent demonstration that we can ship on the brand new NDF Strategy and its dedication to supply flexible and scalable financing as well as catalytic impression. It has all of the elements that define NDFs added value within the climate financing landscape. It demonstrates our capability to convene and mobilise extra financing, as well as our distinctive mi of financing devices to match the needs of our companions, public or non-public. We are proud to be standing with our partners and supporting the emergence of a greener economy, 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 merchandise and client credit score. FEI-OGEF is happy to have the ability to refinance our inventor mortgage into this new working capital facility and continue that progress alongside a committed and constructive group of lenders, famous Harr Guinness from Lions Head.
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Judith Santbergen, Senior Investment Manager at AlphaMundi, said: “Since 2018, AlphaMundi has successively supplied support to SunCulture through a mix of technical help and debt funding. We are excited to continue and enhance our funding within the firm via this new, innovative working capital facility.
Sjoerd Melsert, Senior Investment Manager at Triodos Investment Management, mentioned: “SunCulture is a superb instance of an revolutionary company that is energetic on the nexus of renewable power and agriculture, using solar power to extend farmers’ incomes. Our facility helps the additional growth 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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