Sun King and Citi Collaborate on $130M Sustainable Securitization to Expand Off-Grid Solar in Kenya

Africa-focused solar home systems provider, Sun King (formerly Greenlight Planet), and the New York-based global bank, Citi, have collaborated to establish a scalable loan instrument to finance off-grid solar systems in Kenya. The organizations have joined hands for a sustainable securitization transaction worth $130 million to support the electrification of underserved communities in Kenya.

Securitization is the financial technique that transforms illiquid assets, such as loans, into easily tradable securities like bonds. Kenya has been a testing ground for sustainable securitization methods aimed at financing electrification projects. The new project is particularly noteworthy due to its sustainable nature, as it promotes electrification through the use of off-grid solar systems.

Sun King offers various solutions, including solar lanterns and solar home systems facilitated through a pay-as-you-go system. The company formed the four-year sustainable securitization deal with Citi to sell its equipment at affordable prices, enabling electricity access for poor communities. The transaction is completely denominated in the local currency, the Kenyan shilling.

Recognizing the positive impact of this initiative, several institutions have participated in the deal including British International Investment (BII), the Dutch entrepreneurial development bank FMO, and the Norwegian development finance institution NORFUND. Additionally, the Kenyan subsidiary of British bank Standard Chartered, the Trade and Development Bank (TDB), and the Kenyan subsidiary of the South African bank Absa, have also taken part in this transaction.

Anish Thakkar, Co-founder of Sun King, expressed appreciation for Citi’s innovative orchestration of this transaction, highlighting how such financial mechanisms can transform global challenges related to energy access, social development, and climate action into attractive investment opportunities. Thakkar also added that the securitization holds the potential to unlock substantial capital required to fund solar energy initiatives on a scale that is crucial in addressing the climate crisis.

Sun King’s securitization-based financing for electrification complements other solar energy financing initiatives in Kenya, including the partnership between the US-based solar home systems provider d.light and Solar Frontier Capital (SFC), a subsidiary of African Frontier Capital (AFC). Together, they have launched the Brighter Life Kenya 1 (BLK1) facility, valued at approximately KSh 6.5 billion (~$65 million), with the aim of providing electricity access to 1.2 million Kenyans through solar home systems.