With the goal of expanding access to off-grid solar energy in Kenya, the US-based solar products firm Sun King recently won a loan securitization denominated in Kenyan shillings equivalent to USD 130 million. Among the private participants are: (1) the Kenyan unit of Amalgamated Banks of South Africa (ABSA); (2) US-based financial services provider Citi; and (3) Kenya’s Stanbic Bank, a unit of South Africa-based Standard Bank Group. ABSA Kenya is investing KES 2 billion (USD 14 million) in the securitization, and Stanbic is partnering with government-backed British International Investment (BII) to provide USD 20 million. Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), which is controlled by the Dutch government, is lending USD 20 million to Sun King as part of the package.
In addition to Citi, the following investors are participating in the securitization in undisclosed amounts: the Norwegian government’s Norfund, and the multilateral Eastern and Southern African Trade and Development Bank (TDB). Citi arranged the loan package, and Stanbic was Citi’s co-placement agent.
Sun King sells and finances solar-powered home and business products. The firm, which was founded in 2009 as Greenlight Planet, has since grown to employ 2,500 people, serving 100 million users in 65 countries in Africa and Asia as of 2023. Its products include solar panels, appliances, inverters and storage systems. Many of these are sold on a pay-as-you-go basis, meaning that Sun King can turn the products off and on as the user chooses to make payments.
Citi was founded in 1998 as the result of a merger of Travelers Group and Citicorp. Its headquarters are in New York City, and it reports 2022 revenue of USD 75 billion, having ended the year with USD 2.4 trillion in total assets.
By Elva Montelongo, Research Associate
Sources and Additional Sources
Sun King press release
https://sunking.com/solar-news/sun-king-and-citi-close-first-130-million-securitisation-to-broaden-access-to-finance-for-off-grid-solar-in-kenya/
FMO transaction summary
https://www.fmo.nl/news-detail/f27cdc92-a1fc-49cd-88d5-b2a285e79683/monthly-transaction-overview-may-2023
Citi annual report
https://www.citigroup.com/global/investors/annual-reports-and-proxy-statements/2023/annual-report
ABSA Kenya homepage
https://www.absabank.co.ke/
Capital Business news release
https://www.capitalfm.co.ke/business/2023/06/absa-to-invest-sh2-billion-in-solar-energy-projects
BII homepage
https://www.bii.co.uk/
Norfund homepage
https://www.norfund.no/
TDB homepage
https://www.tdbgroup.org/
Standard Bank Group homepage
https://www.standardbank.co.za/
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