SunFunder is the leading debt-financing provider for distributed solar in Africa and other emerging regions, bringing access to energy and long-term climate investments. It has closed over USD 150 million in loans to 57 solar companies working in off-grid solar, mini-grids, agri-solar and other commercial & industrial (C&I) solar projects. These investments mitigate carbon emissions by replacing fossil fuels, and also help communities adapt to climate change by increasing resilience in local economies and food systems.

Founded in 2012, it was the first mover in addressing the debt financing bottleneck faced by off-grid solar companies, and has built a team with unique market expertise and local presence. SunFunder has also devised new blended finance vehicles through a series of its own managed funds, unlocking more than USD 150 million from public and private sources. SunFunder’s focus is now on scaling its climate impact, launching the first of its new “Gigaton” funds with an initial USD 500 million fund and target first closing in 2022.   

Key facts

• SunFunder’s investments have directly resulted in over 750,000 tonnes of annual CO2e mitigation.
• SunFunder’s investments have directly resulted in more than 8 million people gaining improved energy access.
• SunFunder has unlocked over USD 150 million in blended finance, and closed over USD 150 million of debt financing for 57 solar investees in 24 emerging and frontier nations.

The challenge

SunFunder was founded because pioneering off-grid solar companies in Africa were struggling to get loans to grow their businesses and their impact. This was the financing bottleneck to scaling climate solutions that SunFunder made its mission to overcome. The sector was too new and too small for international lenders, and too esoteric for local banks.

The solution

SunFunder’s mission is to pioneer and scale climate investments in emerging markets and underserved communities.

SunFunder has raised the funds to deploy these investments through blended finance vehicles. These have given impact investors like Calvert Impact Capital, development finance institutions like DFC and Swedfund, private investors including Bank of America, catalytic investors like IKEA Foundation and high net worth individuals the opportunity to invest in diversified portfolios, structured with tranches appropriate to their risk/return appetites.

To make these investments, SunFunder’s core value addition has been filling the gap in originating and closing investable pipeline in emerging markets, by building an experienced investment team with sectoral knowledge, structuring expertise and local presence. SunFunder’s work has built track record for an entire sector, which has itself helped it overcome a more general market barrier of solar innovations in emerging markets being perceived as too early-stage and/or risky, and led to many times more investment.

Helping people

SunFunder’s loans have directly resulted in over 8 million people gaining improved energy access. They are predominantly in rural areas of Sub-Saharan Africa, as well as India and some other developing countries. The associated impacts are far reaching. The solar systems installed by the companies SunFunder works with mean that children have light to do their homework at night and their households can adopt modern appliances and are no longer reliant on toxic and dangerous kerosene, improving health, safety, and air quality. Farmers using solar irrigation pumps increase their production and resilience to climate risks, while for businesses the benefits of cutting costs and emissions and improving the reliability of their energy supply through C&I solar bring wider benefits for local economies and jobs.

The companies that SunFunder finances serve their beneficiaries as customers who make their own decisions based on their preferences. They are driven by environmental and social impact alongside the commercial reality that they have to make their offerings affordable, attractive and sustainable - in other words, they are building high quality businesses for the long term. This also means they build large teams in the countries they operate in, and in many places offer the leading employment opportunities. This has disproportionately benefitted women, in some cases having access to their first white collar job opportunities.

Spillover effect

As a specialist finance company, SunFunder’s work is highly scalable. SunFunder has built a team with in-house expertise across the full investment cycle, including origination, structuring and technical due diligence. This year it has been expanding its team to increase its climate investments in emerging markets, including Southeast Asia.

SunFunder has ambitious plans to scale its climate impact: its vision is to mitigate at least 1 gigaton of CO2e emissions by catalysing billions into climate smart solutions that reduce inequality, which will impact over 100 million people with access to affordable, clean energy. Having completed its Solar Energy Transformation (SET) Fund earlier this year, SunFunder is launching the first in a new series of “Gigaton” funds designed for scale, with an initial USD 500 million fund and target first closing in 2022.

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