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Absa Bank announces mega-investment in off-grid solar energy

Absa Bank explained the significant impact that off-grid solar energy will bring to Kenyans who currently lack access to clean and dependable sources of energy

A file image of solar panels

Absa Bank Kenya Plc has announced a substantial investment of Sh2billion in a mega sustainable finance transaction aimed at increasing off-grid solar energy adoption across Kenya.

This significant investment is part of a syndicated finance facility worth Sh17.9 billion, which brings together multiple commercial banks and partners to channel funding into environmentally friendly projects.

The innovative transaction utilizes payments from present and future customers of Sun King, the world's largest off-grid solar energy company, to raise funds for future growth and expansion.

The investment by Absa Bank Kenya will contribute to a Special Purpose Vehicle called Sunking Financing Ltd, which will acquire eligible receivables from Sun King Kenya. The objective is to facilitate the acquisition of solar equipment through customers' future payments on credit.

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By securitizing these payments and involving investors, the transaction aims to provide the necessary capital to expand access to clean, reliable, and environmentally friendly energy solutions. This initiative will help address the electricity deficit faced by approximately 30% of Kenyans, who currently live without access to electricity.

Absa Bank Kenya's Managing Principal for Corporate and Investment Banking, James Agin, highlighted the organization's commitment to sustainable financing for its customers. He expressed enthusiasm for the collaboration, emphasizing the positive impact it will have on households by providing clean energy.

“As an organization, we are making deliberate efforts to entrench and drive sustainable financing for our customers in line with our overall sustainability agenda. We are thus pleased to collaborate in this arrangement which comes with a significant positive impact through the provision of clean energy to households," Agin said.

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Agin also commended the close collaboration with leading financial institutions, which has facilitated the smooth execution of the transaction. This investment aligns with Absa Bank Kenya's overall sustainability agenda and showcases their dedication to driving positive change through financial innovation.

Sun King's Co-Founder, Anish Thakkar, emphasized the significance of the pay-as-you-go service provided by the company. This financing model eliminates the upfront cost barrier that often prevents consumers from adopting solar energy systems.

Thakkar highlighted the potential of these trailblazing financial mechanisms to transform global challenges into compelling investment opportunities.

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