Lais Lona Business Development Africa - SunFunder

Financing the off-grid sector: An overview of sector growth, challenges,

and opportunities

• Introduction: GOGLA & SunFunder? • Accelerating the growth of the off-grid solar market:

focus on finance • Q&A

Agenda

What is GOGLA?

Neutral, independent, not-for-profit advocate for the emerging off-grid lighting and household electrification

industry.

Promoting energy access solutions that benefit society and businesses in developing and emerging country markets.

90+ GOGLA members - mostly manufacturers & distributors - attracting >USD 500 million of investments

.

INDUSTRY

GOGLA’s members (May 2017)

ASSOCIATE

SunFunder?

A leading financial intermediary in Beyond the Grid solar Industry

$40 million unlocked

Less than 1% default rate

2.7 million people impacted in 12 countries

SunFunder raises debt capital by offering investors a range of products to invest in a diversified, vetted and high-impact portfolio of emerging market solar opportunities

SunFunder deploys debt capital by making inventory, structured finance and working capital loans to solar companies and projects in emerging markets

Impact Investors

Foundations

Donors

DFIs

SPVs Solar Notes

Funds

Working capital

Structured finance

Inventory loans

Pay-as-you-go home systems

Microgrids

C&I Solar

Distributors

Institutional & Commercial investors

Advisory services

Syndication

Business Model

Solar lanterns Solar home systems

Commercial & Industrial Solar

Working capital, inventory loans, construction finance and project based finance

Structured finance / SPV models

Direct Finance / PPA models

Loan Types

GOGLA‘s focus: Off-grid solar electrification solutions

Solar Lanterns

Solar Home Systems

Community & Street Lighting

High quality - Affordable - Scalable

Snapshot of the market: July-December 2016 sales

3.77 million Products sold globally in H2 2016

27.2 million Cumulative product sales

since July 2010, 23.7 million of these being

quality verified

US$ 113.9 million Cash sales revenues in

H2 2016 (excluding PAYGO)

8.07 million Products sold in 2016

Sub-Saharan Africa: 1.87 million products sold Cash sales revenues: US$ 53.27 million East Africa: 1.49 million US$ 44.07 million West Africa: 330,561 US$ 8.06 million

85.5 million People with improved energy

access, currently

Accelerating the growth of the off-grid solar market: focus on finance

• Despite the rapid growth of the sector, there is still huge unmet demand – just 700,000 solar home systems installed in East Africa to date

• GOGLA works to strengthen and scale the off-grid solar market through three interlinked pillars, addressing key enablers for growth:

• Through this combined approach, the market can grow to meet

demand in a sustainable way

How to accelerate growth in the off-grid sector?

Protecting consumers with sustainable quality

Facilitating access to finance

Creating an enabling environment

A typical solar company will have financing needs at every stage of the value chain. This will take different forms e.g. inventory finance, working capital, receivables financing, etc.

Off-grid solar financing needs

Manufacturing 1 month

Shipping / transportation 2–3 months

Customs <1 month

Cash

Delivery / sales 1 month

Paygo / leasing

Sales 1 month

Paygo Payment plan 12–36 months

Source: SunFunder

Current status: rapid growth in investment since 2014

Extract taken from Off Grid Solar Market Trends Report 2016

• Off-grid companies are at various stages of the spectrum • New market entrants finding it difficult to raise equity • Industry starting to collaborate to harmonize financial performance reporting • Local and commercial banks tentatively engaging with the sector in select markets • Several major working capital facilities to come online by 2018 Grants

Angel investors, friends and family

Series A, Series B equity Grants for expansion, R&D

Debt secured by inventory or receivables Local currency debt, incl. from commercial banks Securitization of receivables through SPVs

Looking ahead

Thank you!

www.sunfunder.com or email connect@sunfunder.com

For more information, please visit

www.gogla.org or email info@gogla.org