We are joining CDC Group, the UK’s development finance institution (DFI), on a $15m multi-currency debt facility for PEG Africa, a leading solar home system company in West Africa.
The syndicated facility marks the first time we have directly co-invested alongside a DFI. The debt will allow PEG to scale up financing for pay-as-you-go (PAYG) contract receivables from its rapidly expanding customer base. It was closed in conjunction with PEG’s Series C equity round.
“Partnering with CDC allows us to combine the resources and access to local currency of a large DFI with the sector expertise and strong relationships of SunFunder,” said Avi Jacobson, Senior Investment Officer, who led the transaction with Baraka Megiroo, Senior Analyst, at SunFunder.
We were among PEG’s first lenders, closing a $500k loan in 2016. The company’s impressive growth meant SunFunder then arranged and invested in an $8m facility for them in 2017, followed by joining this latest $15m facility just two and a half years since the first.
“As the first PAYG financing company to set up in West Africa, we have always felt that we could build a large, profitable business by being laser focused on financing the solar needs of underserved customers in this region. More than 50% of PEG’s customers earn less than $3 per day, while 89% do not have access to the national electricity grid, and 82% never received financing or access to credit before PEG entered their lives.” said Hugh Whalan, PEG CEO.
Our growing partnership with PEG Africa has been key to our expansion into West Africa. This facility will further develop PEG’s business in both Ghana and Cote d’Ivoire by financing local currency receivables generated by the sale of PAYG solar home systems.
PEG also operates in Senegal, and provides credit for solar home systems and productive assets to underserved households. Their PAYG financing model enables end-users to use solar energy to replace perpetual spending on poor quality and polluting fuels such as kerosene. PEG currently serves more than 60,000 households through 70 service centers with over 400 full-time staff.