d.light closes new $176mln securitization facility for affordable off-grid solar in Kenya, Tanzania and Uganda

PHOTO

Off-grid solar provider d.light and impact investor African Frontier Capital partner on new financing to support consumer loans for solar and high efficiency appliances in East Africa

d.light, the global provider of transformational household products and affordable finance for low-income households, today announced the closing of a new securitization facility that will purchase USD$176 million of receivables in Kenya, Tanzania and Uganda. The new financing is being provided by social impact-focused asset management company African Frontier Capital.

d.light will use the facility to scale up its PayGo consumer finance offering to make solar-powered products available to more low-income households and communities without access to electricity. The facility is multi-currency and will enable access to reliable, renewable energy for an estimated six million people across the three countries over the next three years.

With this new facility, d.light has now closed securitized financing with a total combined purchasing value of USD$718 million across five separate facilities since 2020.

Commenting on the news, d.light CEO Nedjip Tozun said, “This new facility is another landmark step in d.light’s mission to provide people with affordable energy that is also clean, safe and sustainable. It lets us expand our reach so that millions of off-grid families across Kenya, Tanzania and Uganda can experience the benefits of solar energy.

“Facilities like this make possible our pioneering PayGo consumer financing model with which we are able to offer solar home systems and high efficiency appliances to the people that need them most in a way that is affordable and sustainable.”

Tozun continued, “With this new facility, d.light has for the first time in its history receivables-based financing facilities in each of our PayGo markets – Kenya, Uganda, Tanzania, and Nigeria. These facilities allow d.light to remain consistently cash flow positive and remove the requirement for further external equity fundraising to fund our growth.”

d.light has a proven track record in the use of securitized finance to support its solar-powered household products in sub-Saharan Africa. It has previously set up four facilities, beginning in 2020 and including two in Kenya and one each in Nigeria and Tanzania. The combined purchasing value of these existing facilities plus the new facility is USD$718 million.

Earlier this year, in February, d.light announced that its USD$110 million securitization facility, Brighter Life Kenya 1 Limited (BLK1) successfully repaid its entire senior debt in full and ahead of schedule from internally generated cash flows – the first facility in the off-grid solar sector to do so.

d.light has been working with distribution partners in Kenya, Uganda and Tanzania since 2010, and has had its own operations in Kenya since 2011, in Uganda since 2015 and in Tanzania since 2016.

Eric De Moudt, AFC’s founder and CEO, said, “This milestone is a testament to how data-driven financial innovation can play an important role in bringing financial inclusion to the world’s most vulnerable communities, helping them to gain access to clean and modern energy and the ensuing social and economic benefits that come about as a result. We are grateful to d.light for its ongoing leadership in the off-grid solar sector and proud to partner with such a visionary company.”