GuarantCo and SBM Bank Kenya provide Bboxx Kenya with a KES 1.6 billion (c. USD 15 million) financing solution to invest in affordable solar home systems for 470,000 Kenyans

  • Date written
  • January, 2022

GuarantCo, part of the Private Infrastructure Development Group (PIDG), and SBM Bank Kenya, a local commercial bank, provided a KES 1.6 billion (c. USD 15 million) financing solution to Bboxx Kenya, a next generation utility company, to invest in affordable solar home systems for 470,000 Kenyans. GuarantCo supported the transaction with a KES 1.2 billion (USD 11.25 million) partial credit guarantee of 75 percent against the loan facility.

GuarantCo and SBM Bank Kenya provide Bboxx

Historically investments on the African continent in the off-grid SHS sector have been made in hard currency, which can expose companies to significant exchange risks. Through mobilising a local bank, the guarantee will match the currency of funding needs with operations and collections and so contribute to the overall sustainability of the business. This is expected to have wider market benefits through demonstrating a model for domestic banks and increase their appetite to lend to the sector.

The funds will be used by Bboxx Kenya to purchase new inventory over the next two years including 89,600 solar home systems and essential appliances such as fridges and phones. These are expected to serve 470,000 people, 80 percent of whom are based in rural areas and the majority of whom currently use torches and non-traditional fuel, such as wood and kerosene, as their main source of lighting.

Kenya’s electrification rate is estimated at around 70 percent though there is some disparity between urban (90 percent) and rural areas (60 percent). The Kenya National Electrification Strategy, developed in 2018, demonstrates the Government of Kenya’s commitment to scaling up off-grid electrification with ambitions to establish two million new connections by 2022, notably through solar home systems and mini-grids.

The transaction will contribute to United Nation’s Sustainable Development Goals: Affordable and Clean Energy (SDG 7) and Climate Mitigation (SDG 13) through increasing access to affordable and reliable energy.

At present, Bboxx Kenya employees 350 workers, 40 percent of which are women, and the company intends to maintain this proportion of female employment as the workforce as it grows.

The transaction will enable the creation of a further hundred new long-term jobs with efforts to provide opportunities for women in the process.

Emily Bushby, COO/CFO of GuarantCo, said:

We are delighted to partner with Bboxx and SBM Bank to make this solar home systems transaction happen to the benefit of people in Kenya.  This is our sixth deal and first off-grid solar project in Kenya.  We are proud to support the Kenyan government in its ambition to grow its off-grid capabilities and improve affordable, clean energy access to local people while involving the private sector and provide local currency infrastructure project financing which is at the core of GuarantCo’s business. 

Mansoor Hamayun, CEO of Bboxx, said:

We are very pleased to partner with GuarantCo and SBM Bank to accelerate access to clean, reliable, and affordable energy to hundreds of thousands of Kenyans. This fund marks a big milestone in our industry’s history. This transaction shows what is possible to achieve when forging partnerships between different stakeholders to mobilise private capital to the energy sector. This transaction is the largest single loan raised by Bboxx Kenya, it will enable us to unlock potential and transform even more lives for the better through energy access in Kenya. It is a positive step in the right direction in securing more funds to help tackle the global energy access gap and make progress towards meeting UN Sustainable Development Goal 7 – energy for all.

Jeff Vanden Berghe, MD of Bboxx Kenya, said:

Over the past 12 months we have been working closely with GuarantCo and SBM to bring this partnership to fruition. This marks Bboxx Kenya’s first local currency transaction, which allows us to bring more renewable, low-cost and safe energy to an extra 470,000 Kenyans. The partnership will also help us expand our services to more remote regions of the country, working with the Government of Kenya, through its KOSAP program, to bring power to underserved communities.

Jotham Mutoka, Deputy Chief Executive Officer of SBM Bank Kenya, said:

SBM Bank is elated to spur the growth of the energy sector in Kenya through partnerships with like-minded entities such as Bboxx and GuarantCo. Through this transaction, I envision school children being able to access electricity at home to complete their schoolwork when in the past they were in darkness, this will uplift the social-economic status of the entire home leading to a smarter tomorrow.

 

Bboxx virtual celebration ceremony
Bboxx virtual celebration ceremony attended by: Mansoor Hamayun, CEO Bboxx, Jeff Vanden Berghe, MD Bboxx Kenya, Jotham Mutoka, Deputy CEO SBM bank, Emily Bushby, COO/CFO GuarantCo, Philippe Valahu, CEO PIDG.

NOTES TO EDITORS

About GuarantCo

GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia, Sweden and the Netherlands, through the PIDG Trust, France through a stand-by facility and Global Affairs Canada through a repayable facility. GuarantCo is rated AA- by Fitch and A1 by Moody’s. GuarantCo’s activities are managed by GuarantCo Management Company which is part of Cardano Development www.guarantco.com

About PIDG

The Private Infrastructure Development Group (PIDG) is an innovative infrastructure project developer and investor which mobilises private investment in sustainable and inclusive infrastructure in sub-Saharan Africa and south and south-east Asia. PIDG investments promote socio-economic development within a just transition to net zero emissions, combat poverty and contribute to the Sustainable Development Goals (SDGs). PIDG delivers its ambition in line with its values of opportunity, accountability, safety, integrity and impact. Since 2002, PIDG has supported 171 infrastructure projects to financial close which provided an estimated 217 million people with access to new or improved infrastructure. PIDG is funded by the governments of the United Kingdom, the Netherlands, Switzerland, Australia, Sweden, Germany and the IFC www.pidg.org

About Bboxx Kenya

Bboxx is a next generation utility, transforming lives and unlocking potential through access to energy. Bboxx manufactures, distributes and finances decentralised solar powered systems in developing countries. It is scaling through forging strategic partnerships and its innovative technology Bboxx Pulse®, a comprehensive management platform using IoT technology. Through affordable, reliable, and clean utility provision, Bboxx is bringing people into the digital economy, creating new markets, and enabling economic development in off-grid communities and those living without a reliable grid connection. The company is positively impacting the lives of more than 2 million people with its products and services in over 27 markets, directly contributing to 11 of the 17 United Nations Sustainable Development Goals. In Kenya, Bboxx has positively impacted the lives of 570,000 Kenyans. www.bboxx.com

About SBM Bank Kenya

SBM Bank Kenya is a leading and trusted financial institution with an international footprint, headquartered in Mauritius and positioned to offer an unprecedented banking experience in Kenya to retail, SME and corporate clients. The bank started its operations in Kenya in May 2017 and currently has a branch network of 40 branches countrywide. This is complemented by customer touch points such as a round the clock contact centre, ATMs, mobile banking, online banking and extensive agency banking services. Additionally, SBM Bank Kenya operates as an Authorised Depository and as an Authorised Securities Dealer following a license issuance by the Capital Markets Authority. SBM Bank Kenya is regulated by the Central Bank of Kenya.

 

SBM Bank Kenya is a subsidiary of SBM Group Holdings, Mauritius. The Group is mainly owned by the Government of Mauritius and associated entities.