Posted on :Monday , 15th March 2021
Norfund, a Norwegian government investment company joins the Brighter Life Kenya 1 Limited (BLK1) scheme with a US$ 15 million investment. Norfund hopes to provide 1.9 million Kenyans with access to electricity through solar home systems.
Brighter Life Kenya 1 Limited is expanding. The scheme launched in the year 2020 to facilitate the financing of solar home systems in local currency (shilling) in Kenya is registering a US$15 million investment by Norfund, a Norwegian government private equity company. The US$ 65 million facility was set up by Solar Frontier Capital Limited, a wholly owned subsidiary of African Frontier Capital, a Mauritius-based financial company.
The purpose of the facility is to enable the acquisition of receivables on solar home systems on a pay as you go basis from the Kenyan subsidiary of d.light.
With its US$ 15 million investment, Norfund joins the American Development Finance Corporation, a new agency resulting from the union between Overseas Private Investment Corporation and the Development Credit Authority. The financial institution has already committed US$ 20 million per debt commitment for the Brighter Life Kenya 1 facility.
Access to electricity for 1.9 million people
â€œWhile d.light has till now had to work hard constantly to apply for new small bank loans, Norfundâ€™s new facility will finance the purchase of accounts receivable. This means that it takes less time for d.light to pay its suppliers until they get the money back into their accounts,â€ Norfund explains.
The promoters of Brighter Life Kenya 1 believes that Norfundâ€™s investment will provide access to electricity and financial inclusion to 1.9 million people. The scheme is also expected to create US$ 88 million in additional revenue for the Kenyan economy and its consumers while avoiding the emissions of 600,000 tonnes of Carbon Dioxide.
According to Solar Frontier Capital Limited, Brighter Life Kenya 1 has been structured to provide d.light Kenya with local currency financing (up to the equivalent of approximately 127 million Kenyan shillings in face value of purchased receivables) over a 2 year commitment period. It is intended to be the 1st in a series of vehicles designed to provide d.light with continued access to sustainable and affordable local currency financing.