Source; Capital News
Absa Bank Kenya Plc will finance solar projects to a tune of Sh2 billion, with an aim to increase off-grid solar energy adoption across Kenya.
The investment is part of a syndicated finance facility worth Sh17.9 billion ($130 million), which involves several commercial banks and other partners to fund environmentally friendly projects.As part of the agreement, customers’ future payments for solar equipment purchased on credit will be securitized and funded by investors.”As an organization, we are making deliberate efforts to entrench and drive sustainable financing for our customers in line with our overall sustainability agenda,” Absa Bank Kenya Managing Principal for Corporate and Investment Banking James Agin said.”We are thus pleased to collaborate in this arrangement which comes with a significant positive impact through the provision of clean energy to households,” Agin said.”Our close and ongoing collaboration with leading financial institutions has helped ensure the smooth execution of the transaction.
“Being one of the investors, Absa Bank Kenya will provide funding to a Special Purpose Vehicle (Sunking Financing Ltd) to acquire the eligible receivables from Sun King Kenya.The facility will help Kenyan households and companies to shift to clean, reliable, and environmentally friendly energy.
Approximately 30 percent of Kenyans live without access to electricity with many off-grid households devoting 5 to 10 percent of their income to polluting fuels and technologies 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.
“Our proven pay-as-you-go service dismantles the up-front cost barrier that blocks consumers from purchasing solar energy systems,” said Anish Thakkar, Sun King’s Co-Founder.”This securitization is key to unlocking the extensive capital needed to fund solar energy initiatives at the scale the climate crisis requires.”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.