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Azuri Technologies announced the launch of its innovative Sh. 2 billion ($20 million) off-balance-sheet debt financing program. The program will provide working capital for the expansion of off-grid energy and service provision in East Africa.
Simon Bransfield-Garth, Azuri CEO, announced the deal during the GOOGLA conference in Hong Kong. Bransfield-Garth said that deployment of the program would be in phases during 2018.
Azuri has concluded the deployment of Ksh 400 million ($4 million) in Kenya (this marks Azuri’s first phase). The project will provide additional financing to enable Azuri supply its PayGo solar systems to more households across the country.
The initial phase includes investments from the European Union program ElectriFI, alongside Azuri, and its investment partners, including impact investment platform TRINE.
Azuri’s CEO, Simon Bransfield-Garth, commented:
“Completing the first phase of our receivables financing program is a major step for Azuri. The support of ElectriFI is a great vote of confidence in the African off-grid home solar sector as a whole; and in Azuri in particular. It will enable us to attract a new set of commercial investors to expand the impact of our work.”
Subsequent phases of the program will expand to Azuri’s other key territories in East Africa including Tanzania, Uganda, and Zambia.
The PayGo sector has grown rapidly and its continued expansion requires access to substantial levels of commercial debt capital.
The Azuri financing program raises commercial debt; allowing the customers to secure their debts against their future revenues.
According to Bransfield-Garth, the customer’s strong track record of repaying for Azuri’s PayGo products has made this possible.
Debt investors get confidence thanks to repayments and thus are able to use Azuri’s detailed customer data to ensure the finance is duly deployed to intended customers and that customer receipts are appropriately secured.
The multi-phase debt program will enable Azuri to work with a consortium of new sophisticated lenders to support expansion the sector.
Speaking on the sidelines of the event, Hatem Mahbouli, Senior Investment Officer ElectriFI, added:
“A major barrier to investments in access to energy in developing countries is the lack of working capital finance. ElectriFI is delighted to be supporting the off-grid energy sector in sub-Saharan Africa and providing catalytic finance that will help improve the conditions for mainstream investment in this underfunded sector”.
Viktor Andersson, Debt Portfolio Manager at TRINE, commented:
“We are excited to be working with Azuri and ElectriFI on this scalable financing program, which enables our network of sophisticated investors, including family offices, to provide the financing support this fast-growing sector needs and deserves in order to maximise impact.”