SunCulture, a photo voltaic irrigation company headquartered in Nairobi, Kenya, has acquired the first disbursement from a brand new US $11m syndicated debt facility to increase its operations in sub-Saharan Africa.
The new mortgage is groundbreaking for the productive use solar sector because of its dimension and its innovative mixture of working capital and end-user financing.
Arranged by SunFunder, the co-investors in the facility are Nordic Development Fund; Triodos Investment Management, by way of its Hivos-Triodos Fund; SunFunder by way of its Solar Energy Transformation Fund; AlphaMundi by way of each its SocialAlpha and AlphaJiri Investment Funds; and the AfDB’s FEI OGEF managed b Lions Head.
This will enable SunCulture to scale up renewable vitality installations at smallholder farms and households that unwell mitigate over 20,000 tons of CO2 annually as farmers exchange diesel pumps with solar ones while facilitating earnings progress and job alternatives in rural communities.
SunCulture has pioneered a Pay-As-You-Gro enterprise mannequin to make solar-powered irrigation reasonably priced for smallholder farmers in sub-Saharan Africa, combining end-user finance, value-added services, trendy local weather technology, and access to enhance productiveness. A recent report developed b Dalberg Research exhibits that irrigation methods and solar-powered water pumps can improve farmers production between 2 and four occasions, and their revenue between 2 and 6 instances.
READ: SunCulture to distribute solar-powered water pumps across Africa
Samir Ibrahim, Chief Executive Officer at SunCulture, mentioned: “The previous year was devastating for the millions of smallholder farmers in Kenya; 87% are in a worse financial position due to the pandemic. 81% of SunCulture farmers, nonetheless, have been capable of increase their revenue from farming in 2020. Solar irrigation helps create meals security and sovereignty, and it also helps raise people out of poverty. This facility additional permits our efforts to help farmers by offering them with extra of our photo voltaic options, and sooner.”
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 collectively for a standard aim: to help SunCulture attain man more farmers. It reveals how working capital may be combined with finish person financing, which is crucial for making productive use applied sciences inexpensive.”
Surabhi Mathur Visser, Head of Investments at SunFunder, said: This is a pioneering transaction that demonstrates how productive use applied sciences like solar irrigation can be scaled up. SunFunder organized this facility with a similar-minded group of lenders to support an innovative product and enterprise mannequin. We look forward to seeing SunCulture grow in Kenya and ne markets.
Karin Isaksson, Managing Director at NDF, said: “This mortgage to SunCulture is the second prolonged to an organization graduating from the EEP Trust Fund managed by NDF. It is a transparent demonstration that we will ship on the new NDF Strategy and its dedication to supply versatile and scalable financing as properly as catalytic impact. It has all of the elements that outline NDFs added worth in the local weather financing panorama. It demonstrates our capability to convene and mobilise further financing, in addition to our distinctive mi of financing devices to match the wants of our companions, public or non-public. We are proud to be standing with our companions and supporting the emergence of a greener economic system, exactly presently of COVID-19.
Since our first funding in 2019, SunCulture has made huge strides to unlock the potential of smallholder agriculture via progressive merchandise and client credit score. FEI-OGEF is pleased to have the ability to refinance our inventor mortgage into this new working capital facility and continue that development alongside a committed 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 offered support to SunCulture through a mixture of technical assistance and debt funding. We are excited to proceed and improve our investment in the company through this new, progressive working capital facility.
Sjoerd Melsert, Senior Investment Manager at Triodos Investment Management, said: “SunCulture is a great instance of an revolutionary company that is energetic on the nexus of renewable power and agriculture, using photo voltaic energy to increase farmers’ incomes. Our facility helps the further development of SunCultures pay-as-you-go photo voltaic portfolio, resulting in a more sustainable and higher production for smallholder farmers, which is full aligned with the mission, ambition and actions of Hivos-Triodos Fund.”
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