Millions of Kenyan households not yet connected to the national grid could soon have access to affordable solar power, following a USD 50 million (Ksh 6.47 billion) green bond announced today by Standard Chartered and African Frontier Capital a transaction expected to bring clean energy to around 4.3 million people across the region.
Kenya sits at the heart of this transaction. d.light, which has operated in the country since 2011, is one of East Africa’s best-known providers of solar home systems and pay-as-you-go (PayGo) energy finance.
African Frontier Capital, a social impact investment company previously arranged a landmark USD 110 million (Ksh14.24 billion) securitization facility for d.light in Kenya known as Brighter Life Kenya 1 which became the first in the off-grid solar sector to fully repay its senior debt ahead of schedule.
This new transaction builds on that proven track record, positioning Kenya as a cornerstone market for the next phase of d.light’s growth.
The timing is significant. Kenya accounts for nearly three-quarters of all solar home system sales in East Africa, yet a Kenya National Bureau of Statistics survey found that 62.7 per cent of rural households remain off the national grid and the country has set a target of universal electricity access by 2030.
d.light’s PayGo model which allows households to pay for solar systems in small instalments via mobile money has proven especially effective in rural areas where grid coverage remains a challenge.
Beyond the immediate impact on energy access, the transaction signals the maturation of the financing structures available to Kenyan and African clean energy companies.
By combining a green bond private placement with an investment grade financial guarantee, the deal opened access to UK and US institutional investors capital pools that have historically been difficult for Sub-Saharan African issuers to tap.
The bond, which has a four-year maturity and will be listed on the International Securities Market of the London Stock Exchange, also benefited from technical assistance from the Global Green Growth Institute and the UK Foreign, Commonwealth and Development Office’s MOBILIST programme.
Eric De Moudt, CEO of African Frontier Capital, said: “This transaction is a significant step forward in demonstrating how private capital can be mobilised at scale to support distributed renewable energy across Africa. By combining AFC’s operating track record with GGC’s guarantee and Standard Chartered’s capital markets expertise, we connected international institutional investors with a proven portfolio of African assets. We believe this transaction establishes an important blueprint for future capital markets financing in the sector.”
Lasitha Perera, Chief Executive Officer of the Development Guarantee Group, said: “We are proud to have closed the Green Guarantee Company’s second transaction, a major milestone in mobilising climate finance and accelerating sustainable investment.”
Rob Mason, Senior Originator, Debt Capital Markets Africa, Standard Chartered, said: “By combining a green bond private placement with an investment-grade third-party financial guarantee, we are supporting the expansion of distributed solar energy and helping improve access to clean power across Sub-Saharan Africa.”
