The International Finance Corporation (IFC) has announced plans to invest up to $80 million equivalent in local currency in Sun King Nigeria Limited (SNL), a leading distributor and financier of solar products. The funding, structured as a senior loan with a tenor of up to seven years, aims to support the company’s growth in Nigeria’s energy sector while mitigating the risks of currency mismatches amid the country’s inflationary pressures.

The financing package will be distributed as follows:

• $25 million directly from IFC’s account
• $25 million as a blended finance concessional loan mobilized by IFC under the Canada-IFC Renewable Energy Program for Africa (AREI)
• $30 million from a local commercial bank

The funds will enable SNL to expand its Pay-As-You-Go (PAYGO) consumer finance portfolio and extend its range of solar products to low- and middle-income households as well as Micro, Small, and Medium Enterprises (MSMEs). This initiative seeks to provide affordable and clean energy solutions while reducing SNL’s reliance on foreign currency borrowing.

SNL is a wholly owned subsidiary of Greenlight Planet Inc., operating in 33 of Nigeria’s 37 states and leveraging a network of 8,000 agents across 92 sales centers. Its parent company, Greenlight Planet (rebranded as Sun King), has made significant strides in addressing energy poverty, selling solar home systems across over 40 countries in Africa and Asia. The group serves unbanked populations through a global network of 27,000 agents and 352 branches.

Sun King’s PAYGO model allows households to purchase solar products in installments, significantly lowering the barriers to access for low-income families. In Nigeria, where electricity access remains a challenge, this model has proven essential in providing clean and reliable energy solutions.

Sun King has attracted significant investor interest. In 2022, the company raised $260 million in Series D funding, led by BeyondNetZero, the climate investing venture of General Atlantic, with participation from M&G Investments’ Catalyst and Arch Emerging Markets Partners. These funds have supported the development of larger solar systems capable of powering refrigerators and other household appliances.

“Sun King is revolutionizing energy access in Africa and Asia,” said Anish Thakkar, co-founder of the company. “This IFC-backed investment will allow us to scale our operations and reach the next billion energy consumers.”

Sub-Saharan Africa is home to 75% of the world’s population without access to electricity. Countries such as South Sudan, Malawi, and Chad remain among the least electrified globally. Nigeria, despite being Africa’s largest economy, grapples with inadequate grid infrastructure and frequent power outages, leaving millions reliant on expensive and polluting alternatives like kerosene.

The IFC’s investment in Sun King aligns with broader efforts to combat energy poverty and climate change. By providing accessible solar solutions, the initiative not only improves quality of life but also supports global net-zero targets.

With an estimated 1.8 billion people worldwide in need of off-grid energy solutions, companies like Sun King are pivotal in bridging the energy gap. For less than the cost of a single power pole, the company can install an entire solar system, offering a cost-effective alternative to grid expansion.

“Off-grid solar is now more affordable and sustainable than ever,” said Patrick Walsh, co-founder and CEO of Sun King. “Our systems are empowering families, enabling education, and supporting entrepreneurship, all while reducing reliance on polluting fuels.”

The IFC’s financing adheres to the Enhanced Blended Concessional Finance Principles for Development Finance Institutions, ensuring transparency and accountability. The concessional loan component, estimated to provide a 9% subsidy on the total project cost, underscores the high development impact of the project.

This strategic investment comes at a critical time for Nigeria, where rising inflation and currency volatility have posed challenges for businesses. By providing local currency financing, IFC aims to strengthen Sun King ’s ability to scale its operations sustainably, offering a blueprint for tackling energy poverty across Africa and beyond.