Swedfund commits US$12m to Solar Energy Transformation Fund support off-grid sector

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AFRICA – Swedfund, the Swedish Development Finance Institution, has commited US$12 million to the Solar Energy Transformation Fund managed by Nairobi-based sector specialist SunFunder Inc. to support the off-grid sector in sub-Saharan Africa and in Asia.

The investment will contribute to increased access to electricity, as well as the increased generation of renewable energy for exposed demographics in the least developed countries in the world according to the OECD DAC list.

The investment is in line with Swedfund’s Energy & Climate sector goals of investing in the off-grid sector for solar energy, particularly in Sub-Saharan Africa, where more than half of the total population lacks access to electricity.

Swedfund’s capital will be used to provide loans to corporate borrowers active in the off-grid solar space – primarily in Sub-Saharan Africa. The investment will support increased access to electricity as well as increased generation of renewable energy.

This investment gives us, as a Development Finance Institution, the possibility to contribute to climate change mitigation and improved standards of living due to access to affordable and reliable electricity,” says Swedfund’s CEO Maria Håkansson.

“It’s also important for us to provide capital to a fund with an outspoken strategy to invest their way through the COVID-19 pandemic at a point in time where the general interest for investments in developing countries is expected to decrease.”

Swedfund will also contribute by improving the environmental, social and governance processes of the fund in relation to its borrowers.

SunFunder was founded in 2012 and has since grown from a crowdfunding platform to a manager of structured debt funds, all of which have been aimed at financing the off-grid sector for solar energy, primarily in Sub-Saharan Africa.

To date, SunFunder (through its various funding platforms) has provided over US$100 million in debt financing to more than 50 off-grid solar companies, impacting over 7 million people with improved access to energy and mitigating over 700,000 tons of CO2 equivalent emissions annually.

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