Innovative Solutions Found at SunFunder

Over the last five years, Power Africa partner SunFunder has completed $25 million in loans to more than 30 solar companies in the beyond the grid solar sector. Until now all of that debt has been issued in U.S. dollars.

That is now changing for this San Francisco and Tanzania-based business. SunFunder announced the start of an innovative new partnership with hedging facility MFX Solutions in April, which means it now has the capability to offer loans in local currencies.

As SunFunder’s founder and CEO Ryan Levinson explains, “Local currency loans have been a top need for our customers. We’re excited to be able to provide new financial solutions and even more value to the sector.”

The partnership with MFX was facilitated by the U.S. Overseas Private Investment Corporation’s (OPIC) $15 million anchor investment in SunFunder’s Beyond the Grid Solar Fund last year.

Debt capital in local currencies is important because it solves the mismatch between the currency that solar companies receive from their customers, and the currency that solar companies need to repay international lenders like SunFunder.

In many developing countries, exchange rate volatility and local currency depreciation increases the risk both for solar companies and their investors. This can increase the costs passed through to end users and ultimately lower the sector’s overall energy access impact.

SunFunder will now be able to offer its solar customers the option to access working capital, receivables financing, and other structured finance solutions in either U.S. dollars or relevant local currency. The rates on offer for local currency will vary depending on MFX’s own market-based hedging costs.

For more information, visit their website: www.sunfunder.com

Hear more from SunFunder CEO Ryan Levinson at the SEforAll Forum in early April via this Facebook Live video: https://www.facebook.com/sustainableenergyforall/videos/1413170192078930.