High impact investing in solar power to serve people below the poverty line

responsAbility provides USD 14 million to d.light

June 20226 min readClimate Finance

Nairobi, Kenya / Zurich 14 June 2022 — Brighter Life Kenya 2 (“BLK2”), the newly established financing vehicle, receives USD 14 Million of financing from responsAbility, the Swiss sustainable asset manager focused on impact investing. BLK2 is the largest off-balance-sheet financing facility of its kind. The financing provides d.light with flexible working capital. d.light is a leading innovator of solar-powered transformational products for low-income families in Kenya. The funding paves the way for d.light to sustainably expand its operations across Africa. responsAbility’s financing is provided via three funds managed inhouse. responsAbility has had an established relationship with d.light since 2017 and this transaction is a clear step to further supporting d.light’s growth.

responsAbility provides USD 14 Million of funding to the newly launched financing vehicle BLK2, which was jointly established by Solar Frontier Capital Limited, a wholly-owned subsidiary of African Frontier Capital (Mauritius), and d.light design, a leading global innovator of solar-powered transformational products for low-income families. BLK2’s financing will pave the way for d.light to expand its PayGo operations across Africa. ResponsAbility’s debt financing takes place through three funds managed inhouse and is part of a USD 62 Million senior lending facility supported by the US International Development Finance Corporation (DFC), Norfund, and Oikocredit. AFC acts as the subordinated lender as well as the master servicer and back-up servicer under the transaction and, more generally, as sponsor of the structure.

BLK2 is an off-balance sheet financing vehicle that provides d.light with flexible working capital, enabling the company to provide consumer financing and make its products universally available and affordable for customers, most of whom live below the poverty line and lack access to reliable power in Kenya. The facility will finance a range of transformative products that drive quality-of-life improvements, from solar home systems to high-efficiency appliances and smartphones. BLK2 is the largest off-balance-sheet facility in the industry thus far, and comes on the heels of d.light celebrating 125 million lives impacted globally.

BLK2 has been structured to provide d.light with multi-currency financing (up to the equivalent of USD 238 Million in face value of receivables) over a two-year commitment period, giving the company continued access to sustainable and affordable receivable financing for its Kenyan business with a plan to expand to other African countries in the near future. The structure is expected to directly impact over 2.8 million lives including the over 1.9 million people with improved access to clean and modern energy who, together, will reduce over 600,000 metric tons of CO2 emissions.

Mark Davis, EVP Clean Energy at Norfund, commented: “As a long-term equity investor in d.light, Norfund has been impressed with how the company has given millions of people access to clean energy. We are especially pleased that we through this deal are able to provide capital in local currency, to reduce borrowing costs and make it possible for d.light to give increased quality of life through solar energy to even more people.”

Ned Tozun, CEO, d.light, said: "Establishing a large, scalable, multi-currency financing facility will enable millions of families to transform their lives through access to products that were previously out of reach. This facility paves the way for a long-term sustainable business model to bring affordable and transformative technology products to customers who are unbanked and without access to electricity."

James Todd, Head of Renewable Energy at Oikocredit, commented: “This facility will impact the lives of millions in Kenya and we are highly confident that it will prove to be a template for even greater impact across the continent. We are thrilled to be able to support d.light’s continuous upward trajectory through the sustainable expansion of its pay-as-you-go activities.”

Eric De Moudt, Founder and CEO, African Frontier Capital, remarked: "We are incredibly excited to be able to support d.light as it continues to transform so many millions of lives across Africa with such positive environmental and social impact in a financially sustainable manner."

Antonia Schaeli, Deputy Head Direct Investments Climate Finance, responsAbility, said: "We are pleased to be part of this innovative receivable financing structure to support d.light’s dynamic growth in Kenya and across African countries. This further reinforces responsAbility’s partnership with d.light started in 2017, providing financing towards solar-powered transformative products to retail consumers."

About African Frontier Capital (Mauritius) African Frontier Capital (Mauritius) LLC and its subsidiary companies are a dedicated impact investment group of companies focused on bringing financial inclusion to people living at the bottom of the pyramid in a socially and environmentally sustainable way.

About d.light design Founded in 2006 at Stanford, d.light is a global leader in making transformative products available and affordable to low-income families. Most of the customers we serve don’t have access to financing or reliable power, and d.light removes those barriers. We enable financing with our "Pay As You Go" technology and we enable reliable power through our solar energy solutions.

d.light has sold over 25 million products including solar lanterns, solar home systems, TVs, radios and smartphones, impacting the lives of over 125 million people. Our vision is to transform the lives of 1 billion people with sustainable products by 2030.

About DFC U.S. International Development Finance Corporation (DFC) partners with the private sector to finance solutions to the most critical challenges facing the developing world today. We invest across sectors including energy, healthcare, critical infrastructure, and technology. DFC also provides financing for small businesses and women entrepreneurs in order to create jobs in emerging markets. DFC investments adhere to high standards and respect the environment, human rights, and worker rights.

About Norfund Norfund is the Norwegian Investment Fund for developing countries. The mission is to create jobs and to improve lives by investing in businesses that drive sustainable development. Norfund is owned and funded by the Norwegian Government and is the Government’s most important tool for strengthening the private sector in developing countries, and for reducing poverty.

About responsAbility Investments AG responsAbility Investments AG is a leading impact investor focused on private debt and private equity across emerging markets. Founded in 2003 and headquartered in Zurich, it has invested over USD 12 billion since inception and has a strong performance track record. With over 200 employees, collaborating from seven offices, the company invests across three distinctive themes to directly contribute to the United Nations Sustainable Development Goals (SDGs): Financial Inclusion, to finance the growth of Micro & SMEs; Climate Finance, to contribute to a net zero pathway; and Sustainable Food, to sustainably feed an ever-growing population. responsAbility is part of M&G plc, the international savings and investments business, and contributes to enhancing M&G’s capabilities in impact investing.

About Oikocredit Social impact investor and worldwide cooperative Oikocredit has 46 years of experience funding organizations active in financial inclusion, agriculture and renewable energy. Oikocredit's loans, equity investments and capacity building aim to enable people on low incomes in Africa, Asia and Latin America to improve their living standards sustainably. Oikocredit finances 527 partners, with total outstanding capital of € 996 million (as of 31 December 2021).

Media Contact AFC info@africanfrontiercapital.com d.light design media@dlight.com

Contact

Stephanie Bilo
responsAbility Investments
+41 44 403 0553
stephanie.bilo@responsAbility.com

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This information was produced by responsAbility Investments AG together with its partners to the best of its knowledge and belief. However, responsAbility Investments AG provides no guarantee with regards to its content and completeness and does not accept any liability for losses which might arise from making use of this information. The opinions expressed in this information material are those of responsAbility Investments AG at the time of writing and are subject to change at any time without notice. If nothing is indicated to the contrary, all figures are unaudited. This material is provided for information purposes only. It does not constitute an offer or a recommendation to buy or sell financial instruments or services and does not release the recipient from exercising his/her own judgment. It is expressly not intended for persons who, due to their nationality or place of residence, are not permitted access to such information under local law.

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