Grace Ashiru
Kenyan solar irrigation company SunCulture has closed a $10 million securitisation with Mirova, backed by the repayments its smallholder farmer customers make on their systems. Both companies say other productive-use energy businesses in Africa can copy the structure.
A special purpose vehicle buys the payment receivables from SunCulture’s customers, and Mirova’s Gigaton Fund provides $10 million in senior secured financing against them. SunCulture no longer has to carry those long-dated receivables on its own balance sheet; it can put the freed-up cash into financing new customers. The deal also includes FX protection, which matters because SunCulture’s farmers pay in Kenyan shillings while much of its growth capital has carried dollar exposure.
Founded in 2012, SunCulture has sold more than 85,000 solar irrigation systems. It sells on a pay-as-you-go model it calls “pay-as-you-grow”, which bundles insurance and warranty cover into the repayment schedule. CEO Samir Ibrahim has said Kenyan farmers have always wanted irrigation; what they lacked was affordable financing with the right tenor and currency. In his view, recycling capital faster means more farmers get to irrigate sooner.
Rim Azirar, Mirova’s deputy head of emerging market energy transition, has called the deal a blueprint for other productive-use energy companies, and a way to steer long-term capital into African climate solutions.
The model has limits. Few productive-use solar companies in Africa hold a receivables book big and clean enough to securitise, since smallholder repayments are hard to package for investors used to standard credit profiles. SunCulture’s book, built over more than a decade of pay-as-you-go lending, gave Mirova something concrete to underwrite. For now, only a handful of mature operators can use this structure. It does give the sector a documented precedent for commercial debt priced on real repayment data, much as MNT-Halan used several securitisation tranches in Egypt to fund its consumer lending book.
