OPIC Provides Initial Financing to $85 Mn Solar Energy Transformation Fund

The fund supports businesses providing solar solutions to some of the millions of people in India and Sub-Saharan Africa who lack access to electricity.

A customer in Ghana lights his home using a solar system supplied by PEG Africa, one of SunFunder’s portfolio companies.

The Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, has provided initial financing to SunFunder’s $85 million Solar Energy Transformation Fund which supports businesses providing solar solutions to some of the millions of people in India and Sub-Saharan Africa who lack access to electricity.

The financing is part of a $25 million commitment of senior and junior debt OPIC entered last September. Since OPIC committed financing, two other lenders have also committed loans, bringing the first close total raised to $42.5 million.

This blended financing package includes $7.5 million from Calvert Impact Capital and $5 million from Ceniarth. The IKEA Foundation also provided a grant of $5 million as catalytic capital for the fund.

The Solar Energy Transformation Fund is one of a group of investment vehicles managed by SunFunder, a solar energy finance business working to scale up clean energy access in Africa and Asia by financing solar companies active in off-grid and weak-grid communities.

“This project will advance OPIC’s mission of empowering people in some of the world’s poorest countries by bringing affordable electricity to remote areas that are not connected to an electricity grid,” said Ray W. Washburne, OPIC President and CEO. “As we’ve seen from the additional financing raised, it is also a testament to OPIC’s ability to mobilize additional investment.”

SunFunder projects that the Solar Energy Transformation Fund will improve energy access for three million people and mitigate 480,000 tons of CO2 emissions annually over the nine-year life of the fund. To date, SunFunder has deployed $65 million of debt financing to 46 solar borrowers in Africa and Asia.

“SunFunder has now closed over $100 million in diversified solar debt funds and the SET Fund opens up new opportunities. As our largest fund and with a 9-year tenor, the SET Fund increases both the range and size of debt capital offerings that we can provide, especially for productive use solutions and commercial projects,” said Ryan Levinson, SunFunder founder and CEO. “We’re grateful for the support from this investor group and pleased to be growing these long-standing relationships.”

OPIC’s support of this project advances several Agency priorities including the 2X Women’s Initiative, which supports women-owned and women-led businesses.

“The IKEA Foundation is supporting SunFunder with a $5 million grant for its important work in serving the off-grid communities in East and West Africa and India because we believe that helping families access renewable energy will enable them to afford a better everyday life while also protecting the planet,” Jolanda van Ginkel, Renewable Energy Program Manager at IKEA Foundation.