• Citi acted as lead placement agent and Standard Bank Group acted as co- placement agent. Leading Development finance institutions and commercial lenders participated to help expand Kenyans’ access to finance to purchase green, affordable solar systems.
  • The first-of-its-kind bank-led and entirely Kenyan-Shilling-denominated securitisation deal injects $130 million (USD) into Kenya’s off-grid solar energy sector
  • The four-year deal is issued under Sun King’s new Sustainable Financing Framework and is structured around credit Sun King extends to its Kenyan customers to pay for solar products in affordable instalments
  • The transaction aims to expedite clean and reliable energy access for Kenyan families and businesses

Nairobi – Sun King and Citi have established a first-of-its-kind, bank-led and entirely Kenyan-Shilling-denominated $130 million sustainable securitisation transaction. The transaction leverages Sun King’s existing and future Kenyan customers’ payments for solar products to raise funding for further growth and expansion.

Arranged by Citi and supported by leading development finance institutions and commercial lenders from six countries across the globe, the investment paves the way for future African securitisation deals and diversifies funding for Kenya’s off-grid solar energy sector. Through the proposed transaction, customers’ future payments for solar products bought on credit will be securitised and funded by investors.

Approximately three out of every ten Kenyans live without access to electricity. Many off-grid households devote 5 to 10% of their income to dim, smoky kerosene lanterns or smog-emitting gas generators for light and power. Solar energy offers clean and reliable energy as well as long-term cost savings for homes and businesses, but the upfront equipment cost blocks many Kenyan consumers from transitioning to solar energy.

Sun King designs, distributes, installs and finances solar energy solutions for African and Asian households and businesses who cannot access, rely on or afford traditional electric grid connections. Sun King customers can purchase products using the company’s technology-enabled, pay-as-you-go “Easy Buy” financing service, which breaks payments down into regular, affordable instalments. These payments can be made via mobile money or cash for as little as $0.15 a day. Approximately half of Sun King's registered pay-as-you-go customers in Kenya are women, the majority of whom access formal financing products for the first time.

Under the securitisation structure, investors are financing the pooled expected future payments from over a million Sun King customers. The structure connects unbanked or underbanked customers to the finance they require to purchase solar assets and provides investors with access to a steady yet underserved market that offers risk-diversified returns.

Sun King is raising the securitisation funds using its Sustainable Financing Framework, which has received a Second Party Opinion (SPO) from Moody’s Investor Relations (“Moody’s”). The SPO assesses the framework with a Very Good Sustainable Quality Score (SQS) and highlights its significant contribution to sustainability. The framework, facilitated by Citi, explains Sun King’s approach to integrating sustainability considerations into specific financial instruments, which facilitate enhanced access to clean energy and contribute to meeting the United Nation’s Sustainable Development Goals.

This securitisation involves participations by both commercial and development finance institutions, including Absa Bank Kenya PLC, British International Investment, Citi, FMO, Norfund, Stanbic Kenya and the Southern African Trade and Development Bank. Citi served as the sole arranger, lead placement agent, security agent, facility agent, cash manager, sustainability structuring bank and secured accounts bank with Standard Bank Group acting as the co-placement agent.

Anish Thakkar, Co-Founder, Sun King said:

"Over one billion people live off the reliable electric grid. This number is projected to rise. Sun King's proven pay-as-you-go service dismantles the up-front cost barrier that blocks consumers from purchasing solar energy systems. This securitisation could be key to unlocking the extensive capital needed to fund solar energy initiatives at the scale the climate crisis requires.

“We applaud Citi for orchestrating this innovative transaction, which brings together leading organisations from across development finance and commercial banking sectors. We thank all the investors for their support and trust. These trailblazing financial mechanisms can convert the global challenges of energy access, social development and climate action into compelling investment opportunities.”

Manolo Falco, Global Co-Head of Investment Banking at Citi, said: 

“Sun King has been an important client for many years and we are pleased to be supporting them with this catalytic transaction. Our unrivalled global network and track record for delivering innovative sustainable finance solutions means we are expertly placed to build local sustainable financial infrastructure from the ground up.

“This first-of-its-kind deal originated from Citi’s Social Finance division, which supports socially conscious companies globally and was delivered in conjunction with our leading Financing and Securitisations team.”

Rentia van Tonder, Global Head of Power, Standard Bank said:

“Africa is well positioned to benefit from the green economy, and we are proud to have partnered with Sun King to facilitate this landmark transaction. It is another demonstration of Standard Bank’s ongoing commitment to drive sustainable growth in Africa’s renewable energy sector. Our clients are looking at transitioning to net zero and fast-tracking renewable energy as a key value proposition, and as such we have prioritised sustainable finance as a way to unlock growth across African economies. As the largest bank on the continent, we have the local knowledge and a good opportunity to play a leading role to realise the possibilities presented by Africa’s longer-term structural trends.”

-Ends-

Media Contacts:

Sun King

 

Sam Viney

Sam.viney@sunking.com

Nairobi

Media Contacts:

Citi

 

Victoria Durman

Victoria.durman@citi.com

London

Shani Halstead

Shani.halstead@citi.com

London

Karim Seifeddine

Karim.seifeddine@citi.com

Middle East & Africa

MaryAnne Mwaura

Maryanne.mwaura@citi.com

Kenya

Media Contacts:

Standard Bank
StandardInternational@hkstrategies.com

 

About the transaction

  • This latest transaction follows a landmark transaction for Sun King (Greenlight Planet) in 2021, which saw the solar panel company receive a $75m-equivalent KES-denominated Sustainable Finance Facility
  • Moody's Investor Services has evaluated the framework. The rating affirms Sun King's Significant contribution to sustainability and alignment with Green and Social Bond and Loan principles set by organisations such as the International Capital Market Association, Loan Market Association, Asia Pacific Loan Market Association and Loan Syndications and Trading Association

About the Kenyan market opportunity

  • Kenya has a dynamic digital ecosystem and is a longstanding leader in technology innovation and access to digital infrastructure across sub-Saharan Africa
  • Today, 98% of Kenyans use mobile money and 65% have access to the internet
  • Pay-as-you-go (PAYG) technologies, combined with mobile payments, have enabled a new wave of consumer asset financing for low-income customers. While growth of mobile money has enabled cost-effective payment collection from remote customers.
  • PAYG solar has emerged as one of the strongest use cases for this technology, and the sector has matured from a handful of pilots to a global industry in under a decade

About Citi

Citi is a preeminent banking partner for institutions with cross-border needs, a global leader in wealth management and a valued personal bank in its home market of the United States. Citi does business in nearly 160 countries and jurisdictions, providing corporations, governments, investors, institutions and individuals with a broad range of financial products and services.

Additional information may be found at www.citigroup.com | Twitter: @Citi | YouTube: www.youtube.com/citi  | Blog: http://blog.citigroup.com | Facebook: www.facebook.com/citi | LinkedIn:www.linkedin.com/company/citi

About Standard Bank Group

Standard Bank Group is a client-led and digitally enabled financial solution provider aiming to deliver sustainable growth for individuals, businesses and communities throughout Africa. As Africa’s largest bank with a presence in 20 African countries and four global financial centres, Standard Bank is dedicated to offering expert insight and analysis to businesses and investors driving Africa’s growth. Standard Bank Group reported total assets of R2.9 trillion at 31 December 2022, while its market capitalisation was R284 billion.

About Sun King

Sun King is the world’s largest off-grid solar energy company with cutting-edge product design, affordable financing, and a grassroots installation model to provide energy to the 1.8 billion consumers across Africa and Asia who lack access to reliable electricity. Founded in 2007, Sun King sets the gold standard for off-grid solar performance and design as part of its mission: powering access to brighter lives. For more information, please visit: www.sunking.com.

To date, Sun King has brought power and light to the lives of over 100 million people.[1] As of March 2023, Sun King’s solar products have offset approximately 27.8 metric tonnes of carbon

emissions. This is roughly the equivalent of taking 6.1 million gasoline-powered vehicles off the road for one year.[2]

[1] These statistics were developed using models developed by GOGLA.
[2] This comparison was calculated using The United States Environmental Protection Agency’s Emissions Calculator. Accessed: April, 2023.