SunCulture, a photo voltaic irrigation company headquartered in Nairobi, Kenya, has obtained the primary disbursement from a model new US $11m syndicated debt facility to expand its operations in sub-Saharan Africa.
The new loan is groundbreaking for the productive use solar sector as a end result of its size and its progressive mixture of working capital and end-user financing.
Arranged by SunFunder, the co-investors within the facility are Nordic Development Fund; Triodos Investment Management, through its Hivos-Triodos Fund; SunFunder through 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 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 substitute diesel pumps with solar ones whilst facilitating earnings development and job opportunities in rural communities.
SunCulture has pioneered a Pay-As-You-Gro business mannequin to make solar-powered irrigation affordable for smallholder farmers in sub-Saharan Africa, combining end-user finance, value-added services, modern local weather expertise, and access to improve productivity. A latest report developed b Dalberg Research reveals that irrigation methods and solar-powered water pumps can improve farmers manufacturing between 2 and four times, and their income between 2 and 6 times.
READ: SunCulture to distribute solar-powered water pumps across Africa
Samir Ibrahim, Chief Executive Officer at SunCulture, stated: “The past yr was devastating for the hundreds of thousands of smallholder farmers in Kenya; 87% are in a worse financial position due to the pandemic. 81% of SunCulture farmers, nonetheless, have been in a place to improve their revenue from farming in 2020. Solar irrigation helps create meals security and sovereignty, and it additionally helps raise people out of poverty. This facility further allows our efforts to support farmers by providing them with extra of our photo voltaic options, and quicker.”
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 well collectively for a common objective: to help SunCulture reach man extra farmers. It shows how working capital could be combined with finish user financing, which is important for making productive use applied sciences affordable.”
Surabhi Mathur Visser, Head of Investments at SunFunder, said: This is a pioneering transaction that demonstrates how productive use technologies like solar irrigation could be scaled up. SunFunder arranged this facility with a similar-minded group of lenders to support an progressive product and business mannequin. We sit up for seeing SunCulture develop in Kenya and ne markets.
เกจวัดแรงลม , 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 will ship on the model new NDF Strategy and its commitment to offer versatile and scalable financing in addition to catalytic impression. It has all of the ingredients that define NDFs added value within the local weather financing panorama. It demonstrates our capability to convene and mobilise further financing, as properly as our distinctive mi of financing instruments to match the needs of our companions, public or private. We are proud to be standing with our companions and supporting the emergence of a greener financial system, precisely at this time of COVID-19.
Since our first investment in 2019, SunCulture has made huge strides to unlock the potential of smallholder agriculture through progressive products and shopper credit. FEI-OGEF is joyful to find a way to refinance our inventor mortgage into this new working capital facility and proceed that development alongside a committed and constructive group of lenders, noted Harr Guinness from Lions Head.
READ: SunCulture partner with Togo to hurry up entry to sustainable solar-powered farming
Judith Santbergen, Senior Investment Manager at AlphaMundi, said: “Since 2018, AlphaMundi has successively provided support to SunCulture through a combination of technical assistance and debt funding. We are excited to proceed and increase our investment in the firm through this new, innovative working capital facility.
Sjoerd Melsert, Senior Investment Manager at Triodos Investment Management, mentioned: “SunCulture is a good instance of an progressive firm that’s active on the nexus of renewable power and agriculture, using solar energy to increase farmers’ incomes. Our facility supports the further development of SunCultures pay-as-you-go solar portfolio, leading to a more sustainable and better production for smallholder farmers, which is full aligned with the mission, ambition and actions of Hivos-Triodos Fund.”