SunFunder, a solar energy finance business, has received a US$15 million loan from the Overseas Private Investment Corporation (OPIC), the U.S. government’s development finance institution, to fund startups in Africa that are developing manufacturing, distributing and installing solar lighting and energy systems.
The loan, which was approved for SunFunder’s US$50 million investment vehicle, “Beyond The Grid Solar Fund”, will be used to provide receivables financing, project financing, and inventory/working capital loans to solar energy manufacturers, distributors, installers and retailers in Tanzania, Kenya, Rwanda, Ethiopia, Zambia, Uganda and Ghana.
The types of solar products will range from portable solar powered lamps to 200W solar home systems to 500kW diesel replacement systems.
The social impact of having bright, durable and safe energy will enable businesses to stay open longer and allow children to study at night.
“OPIC is proud to partner with SunFunder in delivering innovative financing solutions for off-grid and grid-deficit solar energy in developing countries,” said Elizabeth Littlefield, OPIC’s President and CEO.
She added, “The fund will facilitate access to financing by companies that provide clean energy products and services.”
Startups that benefit from the loan will provide the millions of people who rely on expensive and inferior energy sources such as kerosene and diesel for their lighting and electricity needs access to reliable and cheap energy.
“Solar energy is the most viable solution to replace dirty and unreliable fossil fuel energy sources and to increase energy access for those who really need it.
“To support solar’s growth in emerging markets, access to sector-specific financing is key. OPIC’s investment in SunFunder’s Beyond The Grid Solar Fund will help expand our ability to respond to the financing gap that exists for off-grid and grid-deficit solar.
Getting this kind of support and validation from OPIC will open up more opportunities not only for solar enterprises but also for investors worldwide,” said Ryan Levinson, SunFunder’s Founder and CEO.
In December 2013, SunFunder received US$150,000 in African Clean Energy Facility (ACEF) funding to expand its client base in Africa and help prepare for its OPIC loan application.
The “Beyond The Grid Solar Fund” was selected for a loan through OPIC’s IFIP, a US$500 million pilot program to support smaller-scale financial intermediaries investing in OPIC-eligible countries with a specific focus on impact and innovation.
The OPIC loan will assist SunFunder, a Power Africa partner, to deliver on its commitment to support Power Africa’s Beyond the Grid sub-Initiative.
Based in San Francisco and Tanzania, SunFunder has a mission to unlock capital for solar energy in emerging markets, where over 2.5 billion people live without access to reliable energy.