SunCulture, a photo voltaic irrigation company headquartered in Nairobi, Kenya, has received the first disbursement from a 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 outcome of its size and its innovative 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 through 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 sick mitigate over 20,000 tons of CO2 yearly as farmers substitute diesel pumps with photo voltaic ones while facilitating earnings growth and job opportunities in rural communities.
SunCulture has pioneered a Pay-As-You-Gro business mannequin to make solar-powered irrigation reasonably priced for smallholder farmers in sub-Saharan Africa, combining end-user finance, value-added companies, modern climate technology, and access to improve productivity. A latest report developed b Dalberg Research reveals that irrigation systems and solar-powered water pumps can increase farmers production between 2 and 4 occasions, and their revenue between 2 and 6 occasions.
READ: SunCulture to distribute solar-powered water pumps across Africa
Samir Ibrahim, Chief Executive Officer at SunCulture, said: “The past 12 months was devastating for the hundreds of thousands of smallholder farmers in Kenya; 87% are in a worse monetary place due to the pandemic. 81% of SunCulture farmers, however, had been in a place to increase their revenue from farming in 2020. Solar irrigation helps create food security and sovereignty, and it additionally helps raise folks out of poverty. This facility additional allows our efforts to help farmers by offering them with extra of our photo voltaic solutions, and faster.”
Jemimah Kwakye-Fosu, Investment Officer, who led the transaction for SunFunder, mentioned: “We are delighted to have led this syndicate of proactive lenders who labored well collectively for a typical objective: to help SunCulture attain man more farmers. It shows how working capital could be mixed with end user financing, which is crucial for making productive use applied sciences affordable.”
Surabhi Mathur Visser, Head of Investments at SunFunder, mentioned: This is a pioneering transaction that demonstrates how productive use applied sciences like photo voltaic irrigation can be scaled up. SunFunder organized this facility with a similar-minded group of lenders to assist an revolutionary product and enterprise model. We look forward to seeing SunCulture grow in Kenya and ne markets.
Karin Isaksson, Managing Director at NDF, stated: “This mortgage to SunCulture is the second extended to an organization graduating from the EEP Trust Fund managed by NDF. It is a clear demonstration that we will deliver on the new NDF Strategy and its dedication to offer flexible and scalable financing in addition to catalytic impression. Factors has all the components that outline NDFs added value in the climate financing panorama. It demonstrates our capability to convene and mobilise extra financing, in addition to our distinctive mi of financing devices to match the wants of our partners, public or non-public. We are proud to be standing with our companions and supporting the emergence of a greener economic system, exactly right now 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 shopper credit score. FEI-OGEF is joyful to have the flexibility to refinance our inventor mortgage into this new working capital facility and continue that growth alongside a dedicated and constructive group of lenders, famous 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, stated: “Since 2018, AlphaMundi has successively supplied support to SunCulture through a combination of technical help and debt funding. We are excited to continue and enhance our investment in the company via this new, revolutionary working capital facility.
Sjoerd Melsert, Senior Investment Manager at Triodos Investment Management, mentioned: “SunCulture is a superb instance of an progressive firm that’s active on the nexus of renewable energy and agriculture, using solar energy to extend farmers’ incomes. Our facility supports the further progress of SunCultures pay-as-you-go solar portfolio, resulting in a more sustainable and better production for smallholder farmers, which is full aligned with the mission, ambition and actions of Hivos-Triodos Fund.”
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