More from: SunFunder

SolarNow Attracts $2 Million Loan Facility to Accelerate Distribution of Solar Home Systems in Uganda

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SolarNow, one of Arc’s partners under the USAID-funded REMMP initiative, announced a new $2 million loan facility from SunFunder. SolarNow is a solar distributor in Uganda that makes solar affordable through a 24-month payment plan. Through this business model, they can ensure that high quality solar be available to low income households. SunFunder has designed a Structured Asset Finance Instrument (SAFI), which allows SolarNow to finance its fast-growing portfolio of payment plans in Uganda.

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SunFunder began lending to SolarNow in 2013 with small, crowdfunded inventory loans. Through these initial loans, SolarNow established a repayment track record that helped enable SunFunder to unlock capital from accredited investors for larger and longer-term loans needed to match SolarNow’s growing working capital needs. In 2015, SunFunder extended facilities totaling over $800,000 of loans to SolarNow. The new SAFI facility builds on SolarNow’s strong track record in sourcing high-quality customers and extending credit on appropriately sized solar home systems based on customers’ energy needs and their ability to repay. The facility will scale SolarNow’s capacity to build and service such customers with contract terms in the future and multiply the positive impact SolarNow can make in the region.

“SunFunder has been a fantastic partner throughout this process,” said SolarNow’s Managing Director Willem Nolens. “With this financing in place, the board and management believe our business is now well placed to accelerate our growth in Uganda and beyond.”

“The launch of SAFI marks a new chapter in our long-standing relationship with a top-quality solar company,” said Audrey Desiderato, SunFunder’s Co-Founder and COO. “Starting with small crowdfunded inventory loans in 2013, we provided larger working capital facilities funded through our Solar Empowerment Fund. The launch of SAFI marks a next step in our relationship and aims to efficiently deliver scale. We are proud to announce this market-leading transaction with SolarNow and play an important role in their continued success in the market.”

About SolarNow
SolarNow offers a range of high-quality solar home systems and electrical appliances that are designed to fit the needs of rural households and entrepreneurs. Their solar home systems range 50 to 5,000 watts and because the systems are modular, customers can easily upgrade existing their systems to increase their system’s power capacity over time. The company offers a wide range of electrical appliances, including high quality LED lights, televisions, fridges, water pumps and flat irons. Through their network of 36 branches in Uganda and by extending appropriate credit to their customers for up to 24 months, SolarNow makes solar accessible and affordable for rural, low-income households and businesses. The company already installed over 10,000 solar systems in Uganda since 2011. These clients benefit from 5 years free service.

Press contact: Mr. John Kizito, Group Controller ([email protected], tel. 0788 916 641)

About SunFunder
SunFunder is a solar energy finance business with a mission to unlock capital for solar energy in emerging markets, where over 2 billion people live without access to reliable energy. SunFunder offers short-term inventory loans, working capital facilities and structured finance facilities to residential and commercial solar companies with a proven track record for quality and growth. SunFunder raises the capital for its loans through private debt offerings that give accredited investors an opportunity to invest in a diversified, vetted, and high impact portfolio of solar loans. The company aims to raise and deploy $1 billion into solar projects around the world by 2020.

Press contact: Mr. David Battley, Director of Structured Finance ([email protected])

SunFunder Announces Closing of US$2.5 Million Funding Round with Schneider Electric – Both Investors in Arc Partner Organizations

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Solar finance startup SunFunder, an investor in Arc Finance partner SolarNow based in Uganda, has closed a US$2.5 million Series A funding round, a milestone for investment in off-grid, small-scale solar. Alongside support from Khosla Impact and Better Ventures, SunFunder secured funding from Schneider Electric, a major multinational player in energy products and key investor in Arc partner Simpa Networks, which manufacturers and distributes solar home systems with a proprietary metering system in Uttar Pradhesh, India.

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Schneider’s involvement is a boon for SunFunder in particular and for small-scale energy finance in general. The role that both have played in working with Arc Finance partners makes this deal something Arc Finance is proud to highlight.

Based in San Francisco and Tanzania, SunFunder provides short-term working capital and project finance loans for solar home systems, microgrids and commercial solar projects in emerging markets. The company raises debt capital through the Solar Empowerment Fund, offering accredited investors a risk-reduced, fixed-income investment opportunity in diverse portfolios of high-impact solar loans across multiple countries and solar technologies. The company is creating a solar finance ecosystem that aims to catalyze billions in financing for solar beyond the grid.

Schneider’s partnership in this venture is a true watershed. An energy giant that has operations in 100 countries and annual sales of US$30 billion in 2013, Schneider has products ranging from circuit breakers to power plants, distributed solar products to AC and DC microgrids. Its involvement is a sign that small-scale solar is moving beyond a niche market and into a mainstream, global one. For Schneider, financing will unlock working capital in order to finance distribution of its wide range of products. Schneider is working on launching its new US$80 million energy access fund with bilateral agencies like the U.K.’s DFID and the EU’s EIB to help unlock capital.

SunFunder, which has provided US$425,000 to Ugandan Arc partner SolarNow (an Arc case study of which can be found HERE) plans to raise and deploy US$100 million in the next three years into solar projects around the world and to expand its capacity in local markets, starting with East Africa. The IEA estimates that the world requires US$44 billion of investment to expand electricity infrastructure to achieve universal energy access by 2030. Of that US$44 billion, it is estimated that US$26 billion will be put towards toward decentralized systems that have been largely powered by renewable energy, according to SunFunder.

SunFunder’s platform for attracting capital to the small-scale, off-grid sector includes the Solar Empowerment Fund (SEF) – a debt facility that issues Solar Notes to accredited and institutional investors, offering a rare opportunity to invest in a diversified, vetted, and high-impact portfolio of off-grid and grid-deficit solar projects with an attractive risk/return profile. In Sept 2013, SunFunder closed its first issuance of Solar Notes, raising US$250,000 from four investors.

In addition, SunFunder is continuing to fundraise from accredited and institutional investors and from its crowdfunding platform, in which non-accredited investors anywhere can invest as little as US$10 in any of the projects listed on SunFunder.com (and is profiled in an Arc Finance briefing note on Crowdfunding, available HERE).

Once a project is fully funded, SunFunder facilitates low-cost financing to the solar partner to fund its implementation. As projects get repaid, investors earn their investment back (without interest, due to current regulatory limitations), which they can invest again or withdraw. SunFunder’s solar partners pay a modest interest rate on the financing that they receive, which is passed back to SunFunder’s investors as Impact Points, which can be reinvested into other projects. See Arc’s Briefing Note on Crowdfunding for a more detailed explanation of how this works.

Ryan Levinson, CEO of SunFunder, shares Arc’s view that access to reliable finance is the main barrier preventing solar energy providers from reaching scale and leapfrogging the grid in target markets. “In the last two years, SunFunder has established a solid track record and proven that the market is economically viable. This investment round will allow us to expand our capacity in local markets and substantially grow our loan portfolio,” he says. For more on Ryan’s thoughts, see Arc’s YouTube channel for a panel discussion video at Arc’s Innovations in Finance conference.

So far, SunFunder has financed more than US$1.7 million for solar projects, with 15 solar companies in six countries, and maintains a zero percent default rate, helping over 140,000 off-grid people in developing countries access affordable solar energy.

At Arc Finance, we’re proud to see SunFunder and Schneider, funders of two key Arc partner organizations, pass this key milestone. As this important and young sector attracts mainstream financing, it demonstrates to new investors that investing in renewable energy for off-grid customers is a sustainable commercial venture – and here to stay.