In a significant stride toward expanding clean energy access in Africa, Sun King has closed a 156 million local currency securitisation deal in Kenya. This transaction, the largest of its kind in Sub-Saharan Africa outside of South Africa, aims to bring off-grid solar energy to an estimated 1.4 million low-income households and small businesses. The move not only reflects growing confidence in solar technology but also signals the viability of pay-as-you-go (PAYG) financing models in emerging markets.
Financing Innovation: A Blueprint for Local Currency Debt
This securitisation marks Sun King's second and most substantial transaction denominated in Kenyan Shillings. The financing was arranged by Citi, with Stanbic Bank Kenya serving as the placement agent, and is supported by five commercial banks, including Absa, Co-operative Bank, KCB, Citi, and Stanbic. Three development finance institutions — British International Investment (UK), FMO (Netherlands), and Norfund (Norway) — also backed the deal, showcasing a collaborative financial effort to drive solar adoption in Kenya.
Leveraging PAYG to Expand Solar Reach
At the heart of Sun King's business model is its PAYG solar system, which enables customers to purchase solar kits for as little as $0.19 per day through mobile money platforms. This innovative approach converts expected future repayments into securitisable financial assets, allowing Sun King to secure long-term funding in local currency. Such financing mechanisms help the company scale operations while maintaining affordability for consumers in underbanked and remote regions.
Impact by the Numbers: Reaching Millions Through Solar Lending
To date, Sun King has disbursed more than $1.3 billion in solar loans, reaching nearly 10 million customers across Africa. In Kenya alone, the company powers approximately 30% of all households with its solar solutions. Building on a previous financing deal from 2023, Sun King is targeting the distribution of 3.7 million solar kits and smartphones in Kenya over the coming years, dramatically expanding its footprint in the region.
Voices of Leadership: Strong Confidence in Green Finance
Anish Thakkar, Co-Founder of Sun King, emphasized the significance of the deal by stating, “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.” Citi’s Global Head of Social Finance, Jorge Rubio Nava, echoed this sentiment, noting that the securitisation demonstrates how PAYG models can scale effectively and attract substantial private capital with the support of development institutions.
A Sustainable Financing Framework with Strong Ratings
The deal was executed under Sun King's Sustainable Financing Framework, which received a Very Good (SQS2) rating from Moody’s, indicating strong environmental and social credentials. Although the securitisation is privately rated, its successful structuring sets a precedent for similar initiatives across the continent. This framework reinforces investor confidence in the sustainability and creditworthiness of Sun King's solar lending model.
National and Regional Implications: Aligning with Broader Energy Goals
This landmark financing aligns with Kenya’s national objective of achieving near-universal electricity access by 2030. It also supports Mission 300 — an initiative led by the World Bank and the African Development Bank — that aims to connect 300 million Africans to electricity. Industry experts have repeatedly emphasized the importance of unlocking domestic capital to meet these ambitious targets, and Sun King’s transaction is a demonstrable step in that direction.
Sun King’s $156 million securitisation highlights a pivotal evolution in financing green energy across Africa, proving that innovative, scalable, and locally financed solutions can deliver tangible impact. As PAYG models gain traction and more financial institutions come on board, the path to universal energy access in Africa becomes increasingly achievable. With local capital now flowing into sustainable ventures, Kenya stands poised as a leader in the continent’s clean energy transformation.