July 19, 2024

Tanzania, Other Countries to Benefit from $176M Solar Facility

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A landmark $176 million financial facility has been secured by d.light, a global leader in off-grid household products, to significantly scale up energy access for millions in East Africa. The funding, provided by African Frontier Capital (AFC), will directly support d.light’s Pay-As-You-Go (PayGo) consumer financing in Tanzania, Kenya, and Uganda, accelerating the distribution of essential solar-powered products to low-income communities.

Innovative Financing to Power 6 Million People

The multi-currency securitization facility is structured to purchase receivables from d.light’s operations, a model that enables the company to expand its reach without raising new equity. This strategy is set to deliver clean and reliable solar energy to an estimated six million people across the three nations over the next three years. The initiative will bolster d.light’s presence in Tanzania, where it has operated since 2016, as well as in Kenya (since 2011) and Uganda (since 2015).

Nedjip Tozun, CEO of d.light, highlighted the facility’s importance, stating it represents a major step in the company’s mission. He emphasized that the financing allows d.light to “expand our reach so that millions of off-grid families across Kenya, Tanzania, and Uganda can experience the benefits of safe and sustainable energy.” This new funding builds on a proven track record, marking the fifth securitization facility for d.light and bringing its total secured financing to $718 million since 2020.

A Boon for Tanzania’s Solar Market

Tanzania, with its abundant solar resources and growing demand for electricity, is particularly well-positioned to gain from this investment. The Tanzanian government has actively encouraged solar adoption by removing VAT and import taxes on solar components, making systems more affordable for both residential and commercial users. This supportive policy environment, combined with d.light’s expanded PayGo offering, creates a powerful synergy to address energy poverty.

This initiative not only delivers eco-friendly power but also champions financial inclusion. As noted by AFC founder and CEO Eric De Moudt, data-driven financial innovation is crucial for serving the world’s most vulnerable communities. The success of d.light’s previous facilities, such as the early repayment of its BLK1 securitization, demonstrates the viability of this model in bringing modern energy solutions to those who need them most.

Sustainable Development Through Strategic Partnerships

The collaboration between d.light and African Frontier Capital underscores the critical role of innovative financial structures in advancing sustainable development goals. By making solar home systems and efficient appliances more accessible, the $176 million facility will improve quality of life, create economic opportunities, and reduce reliance on traditional fossil fuels across the region. With the backing of committed partners, d.light is poised to continue its leadership in the off-grid solar sector, driving positive change for millions of families in East Africa.