Over the past few years, securitisation has become a headline tool for African off-grid solar. PAYGo receivables can now be financed at an institutional scale, signalling credibility and attracting commercial capital.
Yet, the excitement around complex structures sometimes obscures a fundamental truth: timing matters more than sophistication in off-grid solar finance.
A typical PAYGo portfolio breaks even in nine to twelve months. Growth depends on how quickly capital can be deployed into new receivables and recycled again. Structured facilities, on the other hand, often take twelve to eighteen months to close, from origination and due diligence through legal work and documentation.
That delay can outlast a full portfolio cycle. In practice, capital that looks cheaper on paper becomes costlier when it slows deployment, growth, and market expansion.
The sector’s most celebrated securitisations—Sun King’s Kenyan-shilling deals led by Citi, or d.light’s Brighter Life vehicles demonstrated that receivables can anchor local-currency transactions and attract DFIs.
These transactions were important proof points. They showed that African solar receivables could support institutional finance at scale. But the danger is assuming that what works as proof of concept also works as a fit-for-purpose solution.
Operationally, nothing changes just because a balance sheet grows or a financing structure becomes more elaborate. Cash flows remain local-currency, portfolios still turn quickly, and growth is driven by execution, distribution capacity, and how fast capital can be deployed.
Complex securitisations may add layers of legal and reporting obligations, but they do not accelerate the pace at which energy reaches homes.
Simpler capital, on-balance-sheet financing, local-currency facilities, or shorter-term loans aligned with the portfolio cycle often outperforms in practice. It is faster to negotiate, easier to administer, and reduces operational risk.
It keeps cash flows and obligations in one place, supporting the speed and agility that frontier markets demand. When financing fits the business rhythm, capital can be deployed immediately, keeping momentum, market share, and revenue intact.
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This is not a dismissal of structured finance. There is a place for it once portfolios are stable, cash flows predictable, and institutional standards consistently met. When securitisation is well-timed and aligned with the operational cycle, it can improve affordability and resilience for end users. Premature complexity, however, can create fragility.
Covenants and triggers, misaligned with cash flow realities, may inadvertently raise costs or expose operators to FX risk.
In off-grid solar, timing is the ultimate currency. Capital that arrives too late even if cheaper, can cost more than expensive capital delivered on time. Investors, operators, and DFIs must prioritise financing structures that match the speed and scale of distribution, rather than chasing headlines or metrics of sophistication.
By Thuita Gatero, Managing Editor, Africa Digest News. He specializes in conversations around data centers, AI, cloud infrastructure, and energy.
