SBM Bank Kenya has today announced a Ksh. 1.6 billion (USD 15 million) mid-term debt facility to Bboxx Kenya, a next generation company. The facility is aimed at supporting the finance of affordable solar home systems to over 470,000 Kenyans. GuarantCo, part of the Private Infrastructure Development Group (PIDG), has supported the transaction with a Ksh. 1.2 billion (USD 11.25 million) partial guarantee, making up 75% against the loan facility.
The funds will be used by Bboxx Kenya to purchase new inventory over the next 2 years, including 89,600 solar home systems and essential appliances such as fridges and phones. These are expected to serve 470,000 people, 80% of whom are based in rural areas and the majority of whom currently use torches and non-traditional fuel as their main source of lighting.
Kenya’s electrification rate is estimated at around 70%, though there is some disparity between urban at 90% and rural areas at 60%. The Kenya National Electrification Strategy developed in 2018 demonstrates the Government of Kenya’s commitment to scaling up off-grid electrification with plans to establish 2 million new connections by 2022 through solar home systems and mini-grids.
Commenting on the tripartite transaction arrangement, Jotham Mutoka, SBM Bank Kenya’s Deputy Chief Executive Officer (DCEO) 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 school work when in the past they were in darkness, this will uplift the social-economic status of the entire home leading to a smarter tomorrow.”
On her part, 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 Bboxx, had this to say, “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.”