SunCulture, a solar irrigation firm headquartered in Nairobi, Kenya, has received the first 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 photo voltaic sector due to its measurement and its progressive combination of working capital and end-user financing.
Arranged by SunFunder, the co-investors within the facility are Nordic Development Fund; Triodos Investment Management, via its Hivos-Triodos Fund; SunFunder through its Solar Energy Transformation Fund; AlphaMundi through both its SocialAlpha and AlphaJiri Investment Funds; and the AfDB’s FEI OGEF managed b Lions Head.
This will enable SunCulture to scale up renewable power 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 income development and job opportunities in rural communities.
SunCulture has pioneered a Pay-As-You-Gro business model to make solar-powered irrigation affordable for smallholder farmers in sub-Saharan Africa, combining end-user finance, value-added services, trendy local weather expertise, and entry to improve productivity. A recent report developed b Dalberg Research exhibits that irrigation methods and solar-powered water pumps can enhance farmers manufacturing between 2 and four occasions, and their earnings between 2 and 6 times.
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Samir Ibrahim, Chief Executive Officer at SunCulture, stated: “The previous year was devastating for the hundreds of thousands of smallholder farmers in Kenya; 87% are in a worse monetary position due to the pandemic. 81% of SunCulture farmers, nevertheless, were in a position to enhance their revenue from farming in 2020. Solar irrigation helps create meals security and sovereignty, and it additionally helps carry people out of poverty. This facility additional enables our efforts to help farmers by providing them with extra of our solar solutions, 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 worked well together for a standard objective: to assist SunCulture attain man more farmers. It shows how working capital could be combined with finish consumer financing, which is essential for making productive use applied sciences reasonably priced.”
Surabhi Mathur Visser, Head of Investments at SunFunder, stated: 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 revolutionary product and enterprise model. We look forward to seeing SunCulture grow in Kenya and ne markets.
Karin Isaksson, Managing Director at NDF, mentioned: “This loan to SunCulture is the second prolonged to a company graduating from the EEP Trust Fund managed by NDF. It is a transparent demonstration that we will ship on the brand new NDF Strategy and its commitment to offer 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 additional financing, in addition to our distinctive mi of financing instruments to match the wants of our partners, public or private. We are proud to be standing with our partners and supporting the emergence of a greener economic system, precisely right now of COVID-19.
Since our first funding in 2019, SunCulture has made large strides to unlock the potential of smallholder agriculture via revolutionary products and shopper credit. FEI-OGEF is joyful to have the ability to refinance our inventor mortgage into this new working capital facility and continue that progress alongside a dedicated and constructive group of lenders, noted Harr Guinness from Lions Head.
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Judith Santbergen, Senior Investment Manager at AlphaMundi, mentioned: “Since 2018, AlphaMundi has successively provided assist to SunCulture via a mix of technical help and debt investment. We are excited to continue and improve our investment in the firm through this new, revolutionary working capital facility.
Sjoerd Melsert, Senior Investment Manager at Triodos Investment Management, mentioned: “SunCulture is a good instance of an progressive company that is lively on the nexus of renewable energy and agriculture, utilizing solar energy to extend farmers’ incomes. Our facility helps the further growth of SunCultures pay-as-you-go solar portfolio, leading to a extra sustainable and better manufacturing for smallholder farmers, which is full aligned with the mission, ambition and actions of Hivos-Triodos Fund.”
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