Energy services company Solarise Africa has signed a $33.4-million multi-country commercial and industrial facility with the Facility for Energy Inclusion (FEI) to obtain the necessary funding and flexibility to substantially expand its portfolio in Kenya and other selected African countries.
“Throughout 2022, we have significantly grown our footprint and portfolio, and, with this new loan, we will be able to catapult our efforts to advance renewable energy adoption in Africa,” says Solarise Africa CEO and co-founder Jan Albert Valk.
The investment bank Lion’s Head-managed fund FEI acted as the lead arranger for the facility for Solarise Africa’s subsidiaries in Africa and will provide $21.4-million of the total amount. It is joined by social impact investor Oikocredit, which will provide $7-million, and the energy efficiency-focused AfricaGoGreen Fund (AGG), which will provide $5-million.
“The commercial and industrial solar market has huge potential in Africa. This transaction demonstrates the flexibility and client-oriented focus of FEI and Lion’s Head Group. This multi-country loan will allow Solarise Africa to solidify its position in the commercial and industrial solar market in Kenya and expand its activities in other jurisdictions in Africa,” says Lion's Head Asset Management head of debt funds Orli Arav.
Solarise Africa provides decentralised energy solutions for businesses in Africa. It offers full-service solutions through close collaboration with its partners that cover designing, building, financing and maintaining renewable energy installations.
“We are very honoured and grateful for the confidence the investors have shown in us. As the largest debt raise in Africa’s commercial and industrial space to date, this proves that Solarise Africa has a solid business model. We are proud to welcome these three prestigious new investors to our current group of investors,” says Valk.
The FEI was set up by development finance institution (DFI) the African Development Bank (AfDB) as part of its New Deal for Africa initiative.
Further, the transaction was supported by FEI’s Project Preparation Facility (PPF), funded by the Global Environment Facility through the AfDB.
The PPF provides returnable grant funding for last-mile processes that are crucial to closing transactions and to fund due diligence and preparatory costs incurred in establishing innovative structures or transactions that FEI is seeking to lend to.
The FEI also received equity funding from the German Federal Ministry for Economic Cooperation and Development through German development agency KfW and DFI Norfund, as well as a loan commitment from the Austrian Development Bank. The AfDB also invested on behalf of the Clean Technology Fund and the European Commission.
AGG was established by the KFW and has received funding commitments from the German Federal Ministry for Economic Cooperation and Development through KfW, in addition to funding from other development finance institutions.
AGG joined the consortium specifically to finance the installation of industrial machinery that significantly reduces energy usage, Solarise Africa says.