Solar Frontier Capital Limited and solar energy startup d.light, a leading global innovator of solar energy products, have jointly announced the establishment of a KSh6.5 billion ($65 million)financing vehicle to be known as Brighter Life Kenya 1 (BLKI) Limited.
- The off-balance sheet financing vehicle is dedicated to acquiring pay-as-you-go solar home system accounts receivables from d.light’s Kenyan subsidiary to provide the company with flexible, working capital to finance its continued growth.
- BLK1 is expected to finance the provision of improved energy access to 1.2 million people in Kenya, coming on the heels of d.light celebrating its 100 millionth customer.
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- Part of BLK1 is being financed by a Sh2 billion ($18.7 million)senior debt commitment from US International Development Finance Corporation (DFC).
- SFC, a wholly-owned subsidiary of African Frontier Capital (AFC, Mauritius), acts as the subordinated lender and the master servicer under the transaction.
- The project has been structured to provide d.light Kenya with local currency financing over a two-year commitment period and is intended as the first in a series of vehicles designed to provide d.light with continuing access to sustainable and affordable local currency receivable financing.
d.Light At A Glance
- Although started by the Americans Sam Goldman and Ned Tozun, the Kenya-based startup provides solar-powered solutions — ranging from lights, phone chargers, radios, and even televisions — which are sold in over 60 countries.
- In April, it opened a regional office and service center in Eldoret, Kenya as part of the company’s expansion strategy to reach and impact 100 million lives globally by 2020.
- The center offers sales services and after-sales services for d.Light’s products including solar home systems and portable solar powered lanterns.
- In 2019, the startup received up to $18 million capital injection from a consortium of lenders to help accelerate its growth in Africa.
What Does Receivable Financing Mean In Startup Funding?
According to Velotrade, receivables financing takes place when a business receives funding based on purchases that have been made but haven’t been paid for by the clients (accounts receivable).
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