We are launching 2019 with the news that we closed a $9m receivables financing facility with Kampala-based off-grid solar company SolarNow. The new investment marks both the 5th anniversary of our partnership with SolarNow, and a total of $19m that we’ve delivered for SolarNow through direct and syndicated lending.
As our Director of Investments Surabhi Visser put it: “We have just had our 5-year anniversary working with SolarNow, and this takes us to $19m in investments that we’ve arranged or made directly in the company. We are proud to have backed SolarNow’s growth delivering top quality solar systems and appliances throughout Uganda.”
The financing will enable the company to deploy 17,500 new off-grid solar systems to customers in Uganda resulting in approximately 2.5MW of new installed off-grid solar capacity. Among the expected impacts, SolarNow estimates that more than 70,000 women will gain improved energy access in Uganda and over 210,000 tons of greenhouse gas emissions will be avoided through displaced kerosene for lighting.
This facility is SolarNow’s third structured asset finance instrument (SAFI) that we arranged. It is also the third syndication arranged by us with valued co-lenders responsAbility and Oikocredit and the second such syndication for SolarNow, following a similar $6m facility just 14 months ago. We are excited to highlight the value of syndicated facilities: they provide a positive example of the ongoing importance of specialist origination and collaborative investments for emerging market solar.
By syndicating larger amounts with multiple investors, we save our borrowers time so they can concentrate their attention on their customers and core business. As SolarNow CEO Willem Nolens commented: “This syndication and the SAFI structure allow us to minimize the fundraising burden and to focus on our business instead.”
We designed the SAFI product to be a tailored receivables financing structure for solar companies deploying systems through pay-as-you-go and solar leasing models. SAFI finances their credit offerings directly, allowing them to reach more customers.