#solarnow

Uganda-based SolarNow secures $9 million in credit to expand across the country

SolarNow is an energy comany based in Kampala, Uganda. Yesterday, it announced a $9 million credit fund led by SunFunder, a 5-year financier of the company, alongside two other lenders; responsAbility and Oikocredit.

With the funding, the company plans todeploy 17,500 new off-grid solar systems and appliances to customers across Uganda, and in turn generate approximately 2.5MW of new installed…

We are announcing a new $2 million loan facility to SolarNow that marks the launch of SunFunder’s newest product, the Structured Asset Finance Instrument (SAFI). SAFI has been specially created by our team of structured finance experts to meet the needs of the off-grid solar residential market. 

SolarNow is a solar distributor in Uganda that makes solar affordable through a 24-month payment plan. This business model ensures that  they can make high quality solar be available to low income households, but it also turns the company into an extremely working capital intensive business due to the growing receivables. SAFI provides a replicable, flexible transaction structure to finance receivables for solar home system providers selling systems on credit. The initial $2 million SAFI facility is the fourth loan facility between SunFunder and SolarNow, a leading pay-as-you-go solar home system and electrical appliance provider in Uganda.

          A small business with a SolarNow system installed

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.

“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 Chief Operating Officer. “Our partnership with SolarNow has grown with our own evolution as a financier. Starting with small crowdfunded inventory loans, to 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.”

“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 continue our growth in Uganda and beyond.”

          A family in Uganda enjoying solar powered electricity from SolarNow

SAFI draws on well-understood and internationally proven asset-finance concepts which have been consolidated and adapted to the off-grid solar sector. It is designed to be replicable to other solar providers across a wide range of developing markets and expandable in size by permitting additional investors to join a syndicate alongside SunFunder. This structure ensures that any of SunFunder’s loan facility with SAFI can match an operator’s growth profile over the long term on consistent and fair terms, allowing the operator to concentrate on growing their business. The availability of SAFI complements SunFunder’s recently announced OPIC-backed $50 million Beyond The Grid Solar Fund, which will allow SunFunder to provide greater debt capital to companies operating along the solar off-grid and grid-deficit value chain.

Imagine living in a world where there are no lights at night to read, study or do homework. No stove to turn on to cook dinner. No outlet to charge your cellphone. Hard for many to imagine. However, 80% of Uganda’s population has no access to electricity. Kerosene, diesel and firewood are used instead – major contributors to house fires, tragic burns and indoor air pollution. 

SunFunder is dedicated to changing the lives of those 80% of Ugandans, and others around the world by investing in solar energy for them. They are doing it by partnering with companies like SolarNow which provides affordable solar home systems to off-the-grid families and businesses in Uganda. 

PIPs is proud to be partnering with SunFunder and is excited to offer an opportunity to use your hard earned PIPs on this inspirational project – “Switch on Ntungamo.” 

Yesterday we made two exciting accomplishments in one day:

We successfully funded Solar for 4500 students—this is our biggest single loan yet, at $25,000, and it will help boost SunnyMoney's solar schools campaign in Tanzania. Thank you all for making this happen!

We launched Solar Home Systems in off-grid Uganda, our 10th project and first project with new partner, SolarNow. We start in the Masaka district of Uganda, where the $10,000 loan will help finance 50 high quality 50W solar home systems for homes and businesses. 

And today, it gets better. In less than 24 hours, our new project is more than a quarter funded. We are truly impressed at the vigor of our community when it comes to spreading solar; your passion is definitely pushing us to work harder and aim bigger. If you haven't invested in this latest project, you can help break our record and make this our speediest crowdfunding yet!