Bboxx Kenya has secured Sh 1.6 billion loan from SBM Bank Kenya to provide access to clean, reliable, and affordable energy to nearly half a million people through off-grid solar home systems (SHS).
GuarantCo, a part of the Private Infrastructure Development Group (PIDG), has provided a Sh 1.2 billion partial guarantee (75 percent) against the loan facility.
The funds will be used by Bboxx Kenya, ,a next generation utility company, 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.
The guarantee will support Kenya’s broader push towards electrification.
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 enable the creation of a further hundred new long-term jobs with efforts to provide opportunities for women in the process.
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 increasing their appetite to lend to the sector.
“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,”
Mansoor Hamayun, CEO of Bboxx, said,
Jeff Vanden Berghe, Managing Director Bboxx Kenya, said over the past 12 months the company has 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.”
Deputy Chief Executive Officer (DCEO) SBM Bank Kenya Jotham Mutoka said 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,” Mutoka said.