Standard Bank Group, Citi, CDC Group, and Norfund have partnered to provide a $75 million equivalent KES denominated Sustainable Finance Facility for Greenlight Planet Kenya, Africa’s player in off-grid solar home solutions.
The transaction will allow Greenlight Planet to expand access to off-grid solar solutions to off-grid communities throughout Kenya and support its ambitions to reach an additional 10 million households globally in the next 5 years by enabling households to afford “pay-as-you-go” solar home systems through digital financing.
“We at Standard Bank Group are very happy to announce this first to market transaction for Greenlight Planet Kenya. The business’s ESG strategy sits at the core of its business model, and we are proud to have structured a sustainability linked facility that further highlights these commitments. Driving positive environmental and social impact sits at the heart of our Social, Economic and Environmental impact strategy,” Anneke Lund, Executive, Sustainable Finance at Standard Bank Group, said.
The deal involved a high level of collaboration and important contributions from all parties. Citi served as the Sole Coordinator on the transaction, while Standard Bank acted as Sustainability Coordinator and executed the FX conversion to facilitate the repayment of the parent loan, in turn aiding local currency funding.
The KES denominated loan will minimize Greenlight Planet’s exposure to currency exchange fluctuations, allowing the business to focus on growth, employment, and innovation.
The deal also includes integrating sustainability linked KPIs such as the
number of people benefiting from reliable energy financing funding,
cumulative avoidance of CO2 emissions and ensuring a gender-balanced management team that covers both social and environmental metrics.
As existing investors in Greenlight Planet, CDC Group and Norfund’s new round of investments aims to incorporate additional private sector capital and demonstrate the long-term viability of the off-grid solar sector, as well as enable the business to scale its operations in Kenya.
“Off-grid solar home systems are a vital way to expand access to clean energy and to supplement national grids that may not have the reach to help transform the lives of people who are still without electricity. By expanding access to affordable and reliable energy for millions of households in underserved communities, Citi’s financing of Greenlight Planet helps address social, economic and environmental challenges of low-income households in Kenya and beyond as part of our commitment to support social-focused developments in emerging markets,” Michael Mutiga, Managing Director, Head of Corporate Finance, SSA, Citi said.
The transaction aligns Greenlight Planet’s funding with its environmental and social impact goals linked to financial inclusion, clean energy and gender equality by incorporating Sustainability Performance Targets into the facility.
“600 million off-grid homes will spend over a thousand dollars each on smoky, carbon-emitting kerosene lamps for household light in the next decade. Many of them simply need short-term purchase financing to be able to afford one of our clean, rooftop Sun King solar systems to light their home and power appliances like their phone or a TV. This facility led by Standard Bank, Citi, Norfund, and CDC will allow hundreds of thousands of off-grid families to make the switch from kerosene to clean, safe, and abundant rooftop solar,” Anish Thakkar, Co-founder, Greenlight Planet Kenya, said.