TDB extends financing to Sunspot Energy to provide solar home systems kits in Kenya
The Eastern and Southern African Trade and Development Bank (TDB) announced the closing of $4.2 million transaction with Sunspot Energy Kenya Limited (operating as Spark Possibilities), to finance new solar home systems in Kenya.
The financing will enable Spark Possibilities to offer an expanded range of solar energy solutions to more households in Kenya and to enter other markets in Sub-Saharan Africa. The relationship underscores the potential for more private sector mobilization, access to improved, reliable and affordable electricity, and contributes to the realization of multiple Sustainable Development Goals (SDGs) including SDG 7 Affordable and Clean Energy, SDG 5 Gender Equality, and SDG 13 Climate Action.
Admassu Tadesse, TDB President Emeritus and Group Managing Director said: “In line with TDB’s progressive growth in green energy and SME portfolios, the Bank has been expanding its suite of innovative low-carbon product offerings for clients, including for MSMEs in the region it serves. With 25% of the Kenyan population still lacking access to electricity and almost 30% in rural areas, we are excited to finance Spark Possibilities to build more solar home systems, enabling those who need it the most to run their businesses, study, and improve their living standards overall.”
This transaction is supported by TDB’s $75 million SME Off-Grid Facility, in turn supported by a $415 million World Bank Regional Infrastructure Finance Facility (RIFF) signed with TDB in 2020 – the first of its kind to be extended to a regional development bank by the World Bank’s International Development Association (IDA). Through this facility, TDB finances long-term infrastructure projects, particularly in renewable energy, including those of micro, small and medium enterprises (MSMEs) in need of debt financing.
“With 1,200 jobs expected to be created by the end of 2022 including 700 representatives in local communities, 40% of which are women, Spark Possibilities is growing into an impactful business, which in addition to reducing the electrification gap, is empowering youth and women in rural and semi-rural areas. We are pleased to be part of their story,” said Michael Awori, TDB Deputy CEO and COO. “Via this transaction, we look forward to working together to contribute to further driving triple bottom-line impact in our region.”
Founded in 2016, Sunspot Energy Kenya Limited provides affordable, high-value, reliable pay-as-you-go (PayG) solar home systems to customers in rural and semi-rural communities in Kenya. Sunspot has scaled-up principally through private sector funding without any meaningful support from any grant, philanthropic or governmental programs. As a certified B Corp, the company’s core business model contributes to ethical and environmental objectives that align with multiple SDGs. As part of its commitment to grassroots development, most of Sunspot’s personnel is under 30 years old, 99% of its staff is Kenyan, and half of its employees are women. To date, Sunspot operates across 12 Kenyan communities.
“This financing marks a new chapter,” said Hal Peters, CEO and Co-founder of Sunspot Energy Kenya Limited. “Having TDB as a long-term partner further raises the bar for our young company, which plans to not only grow its Kenyan footprint but also expand into new Sub-Saharan countries in 2022. With this transaction, TDB has visibly demonstrated its expertise to create an innovative, bespoke debt structure. Clearly understanding prospective financial capacity along the company’s growth path is significant – TDB has great team, and we are delighted that they are our financial partner.”