KENYA – SunCulture, supplier of solar powered irrigation systems headquartered in Kenya has to its disposal a US$11m syndicated debt facility to enable it disseminate its solution in Africa.
The new loan was arranged by SunFunder who also contributed to it, alongside a group of other lenders i.e., Triodos Investment Management, Nordic Development Fund, AlphaMundi and the AfDB’s FEI OGEF managed by Lion’s Head.
This loan will enable the start-up to scale up renewable energy installations at smallholder farms and households that will mitigate over 20,000 tons of CO2 annually, as farmers replace diesel pumps with solar ones while facilitating income growth and job opportunities in rural communities.
According to Samir Ibrahim, Chief Executive Officer at SunCulture, 87% of small-holder farmers in Kenya are in a worse position following the onset of the COVID-19 pandemic, however, 81% of its farmers, were able to increase their revenue from farming in 2020.
“Solar irrigation helps create food security and sovereignty, and it also helps lift people out of poverty. This facility further enables our efforts to support farmers by providing them with more of our solar solutions, and faster,” he said.
The acquisition of the facility comes in quick succession after the agritech company raised US$14 million from Energy Access Ventures (EAV), Electricité de France (EDF), Acumen Capital Partners (ACP) and Dream Project Incubators (DPI) in December.
Jemimah Kwakye-Fosu, Investment Officer, who led the recent transaction for SunFunder, said, “We are delighted to have led this syndicate of proactive lenders who worked well together for a common goal: to help SunCulture reach many more farmers.
“It shows how working capital can be combined with end user financing, which is essential for making productive use technologies affordable.”
SunCulture’s water pump is equipped with 300 Wh solar panels and a 440 Wh battery storage system. These batteries can hold four light bulbs, two telephones and a plug-in submersible water pump.
“Solar irrigation helps create food security and sovereignty, and it also helps lift people out of poverty.”Samir Ibrahim – Chief Executive Officer at SunCulture
To facilitate the acquisition of its equipment in rural areas where purchasing power is often low, the Nairobi-based company uses the pay-as-you-go model, combining end-user finance, value-added services, modern climate technology, and access to improve productivity.
“SunCulture is a great example of an innovative company that is active on the nexus of renewable energy and agriculture, using solar energy to increase farmers’ incomes,” Sjoerd Melsert, Senior Investment Manager at Triodos Investment Management, said.
“Our facility supports the further growth of SunCultures pay-as-you-go solar portfolio, leading to a more sustainable and higher production for smallholder farmers, which is full aligned with the mission, ambition and activities of Hivos-Triodos Fund,” he added.
A recent report by Dalberg shows that irrigation systems and solar-powered water pumps can increase farmers’ production between 2 and 4 times, and their income between 2 and 6 times.
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