For most of its history, financing off-grid solar energy in Africa has been a private affair — stitched together through development finance institutions, impact investors, and patient capital willing to accept the slow rhythms of base-of-pyramid lending. That model has delivered real results, but it has also had a ceiling. Getting mainstream institutional money into the asset class has remained elusive.
A transaction announced this week by d.light, the Nairobi- and San Francisco-based solar energy and Pay-As-You-Go (PAYGo) financing company, may have just broken through that ceiling.
African Frontier Capital (AFC), d.light’s securitisation partner, has issued a $50 million Green Bond that will be listed on the London Stock Exchange’s International Securities Market — the first time the off-grid solar sector has accessed public bond markets through a PAYGo receivables securitisation structure. The bond carries a full guarantee of principal and interest from the Green Guarantee Company (GGC), a climate-focused guarantor backed by the Green Climate Fund, the UK government, KfW Development Bank, and others. Fitch has rated the notes BBB, with maturity in 2030. Standard Chartered Bank acted as placement and settlement agent.
The listing brings d.light’s cumulative PAYGo receivables purchasing capacity to $1 billion — a milestone that few in the off-grid energy sector thought achievable when the company pioneered the first-ever PAYGo securitisation back in 2020.
“In 2020, d.light helped pioneer the first securitisation of PAYGo solar receivables in the sector,” said Nedjip Tozun, co-founder and CEO of d.light. “Since then, we have built a platform with $1 billion of cumulative purchasing capacity, and today we are bringing that platform into the public bond markets.”
What makes this structurally different
The mechanics matter here. PAYGo solar works by allowing low-income households — many earning less than $5 a day — to pay for solar home systems in micro-instalments, sometimes as low as $2 a week, rather than prohibitive upfront sums. As customers make those payments, they generate a stream of receivables. D.light’s model bundles thousands of those individual loan repayments into a single investable structure that can be rated, listed, and sold to institutional buyers.
Until now, transactions of this type have remained in private credit markets, accessible only to DFIs and specialised impact funds. What the AFC green bond does differently is bring that structure into a publicly listed format — one that is rated, independently verified through a Second Party Opinion from Sustainable Fitch, and eligible for institutional buyers who can only hold instruments meeting those criteria.
That distinction matters enormously. Pension funds, insurance companies, and asset managers managing trillions of dollars in assets are often prevented by mandate from investing in unlisted or unrated paper. By meeting those requirements, d.light’s platform has, in principle, opened access to a far larger pool of capital.
The bond was placed with a mix of UK and US institutional investors including Legal & General, Calvert Impact Capital, and Ceniarth — names that signal genuine crossover from the mainstream finance world into what has historically been a niche asset class.
A six-year journey to get here
The transaction is the latest in a sequence of deliberate structural innovations that d.light has used to build institutional confidence in African solar receivables as an asset class.
The company issued Brighter Life Kenya 1 (BLK1) in May 2020 — the sector’s first PAYGo securitisation. In August 2023, its second Kenya facility received an investment-grade private credit rating, another first. Then, in February 2024, BLK1 became the first off-grid solar securitisation to fully repay its senior debt ahead of schedule, entirely from internally generated cash flows — a signal to investors that the underlying borrowers, often classified as unbanked and uncreditworthy by traditional lenders, were in fact repaying reliably.
By July 2024, d.light had launched a multi-currency structure enabling local-currency receivables financing across several African markets simultaneously — hedging against the foreign exchange volatility that has historically undermined cross-border lending in the region.
The LSE-listed green bond is the culmination of that track record. Each step was designed to answer a specific investor concern: credit quality, repayment performance, currency risk, ratings visibility. The $50 million bond is less a one-off transaction and more the output of a six-year effort to make a new asset class legible to global capital markets.
The scale of what’s at stake
D.light says its securitisation platform is now expected to enable over 20 million new first-time energy access connections across its markets by 2030, while creating more than 50,000 jobs. The $50 million green bond alone is expected to expand clean energy access for approximately 4.3 million people across Sub-Saharan Africa.
Those numbers place d.light in a small group of platforms capable of contributing meaningfully to the World Bank’s Mission 300 initiative, which targets 300 million new electricity connections across Africa by 2030. Reaching that goal will require far more than DFI capital alone. The World Bank and its partners have been explicit that private and commercial capital must play a much larger role.
The GGC guarantee structure is designed with exactly that logic in mind. By improving the credit profile of the bond and reducing the cost of capital, it allows d.light to offer more affordable financing to end customers — and in doing so, recycles DFI and multilateral capital in a way that is intended to be replicable. The model’s designers are betting that this transaction will serve as a proof point that other issuers, in solar and potentially beyond, can follow.
What it signals for the sector
The off-grid solar sector has spent years arguing that African consumer credit — even at the base of the pyramid — is a fundable, investable asset. D.light’s track record, and now this LSE listing, is the most compelling evidence yet that the argument holds up under institutional scrutiny.
For European and US investors watching Africa’s energy transition from a distance, the transaction offers something the sector has lacked: a publicly listed, rated, and independently verified entry point into an asset class that combines genuine development impact with financial performance.
Whether the market will scale around this proof point remains to be seen. But if it does, the implications extend well beyond solar. The securitisation model that d.light has spent six years refining is, at its core, a mechanism for connecting informal-economy borrowers with global capital markets. Energy access is where it has been proven. Agriculture, mobile devices, water infrastructure — other sectors where PAYGo-style lending is beginning to take hold — may be next.
For now, the $1 billion milestone is itself the story. It took fifteen years, several sector firsts, and a guarantee from a climate fund backed by the UK government and the Green Climate Fund to get here. The question for the sector is whether the next billion takes less time.
D.light was founded in 2007 and has sold more than 40 million solar products, reaching over 210 million people. African Frontier Capital has purchased more than $400 million of PAYGo off-grid solar assets across Kenya, Tanzania, Nigeria and Uganda.