Off-grid solar firms secure landmark financing, drawing institutional investors to Africa
Two of Africa's biggest pay-as-you-go solar providers have closed sizable green-bond and securitisation deals, signalling growing interest from mainstream capital markets.
In Nairobi, d.light and Sun King closed groundbreaking financing that could transform Africa's off-grid solar market. d.light’s $50 million green bond, backed by a special-purpose vehicle holding PAY-Go receivables, was launched in June, and Sun King plans a $286 million securitisation of future customer payments for mid-2025. The structures allow the firms to convert years of installment revenue into upfront capital, attracting institutional investors in London and New York.
Company leaders highlight years of repayment data and product improvements that have made the assets investment-grade, though they warn that portfolio-quality risk and high transaction costs still deter many smaller operators. Guarantees from the Green Guarantee Co. and other credit enhancements have de-risked the offerings, but analysts caution that a focus on higher-credit customers could sideline the poorest households. Industry observers view the deals as a tipping point that may broaden climate-finance flows to support Africa’s electrification goals.
Why it matters
The financing shows private capital can now back large-scale solar projects, potentially accelerating electricity access for millions in Africa.
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