Swedfund, the Swedish development finance institution, has committed $12m to SunFunder’s Solar Energy Transformation (SET) Fund to contribute towards increased access to electricity and renewable energy generation in emerging markets.
This latest raise takes SET Fund commitments to $60m, with Swedfund joining anchor investors DFC, Calvert Impact Capital, Ceniarth and IKEA Foundation, among others. The fund’s junior layer has been filled, but there remains $10m available to senior investors.
“We are delighted to start this partnership with Swedfund and expand our work with development finance institutions. To solve energy access and climate change we need to match institutional investments at scale with clean energy projects around the world – which is what our blended funds achieve,” said SunFunder CEO Ryan Levinson. “We are particularly pleased to have now closed all the junior capital in the SET Fund.”
Founded in 2012, SunFunder has offices in the UK and the US in addition to Kenya. The firm has extended approximately USD 152 million in debt financing as of 2019, including via its Solar Empowerment Fund, which had a volume of USD 15 million and matured in 2016, and the Beyond the Grid Solar Fund, which had a volume of USD 47 million and matured in 2017. SunFunder also managed the Kenya Off-Grid Solar Access Project, which had a volume of USD 30 million and matured in 2019.
The $70m SET Fund, SunFunder’s third debt fund, is a 9-year blended finance vehicle for distributed solar and storage investments in African and other emerging economies. SunFunder has now unlocked over $150m in debt financing and made loans 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.
The SET commitment is in line with Swedfund’s energy and climate 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.
“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. 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,” said Swedfund’s CEO Maria Håkansson.
Swedfund was founded in 1979 to fight poverty by investing in sustainable businesses” in Africa, Asia, Eastern Europe and Latin America. As of 2019, it has $817 million in total assets and 64 contracts deployed in 17 countries, totaling to $627 million.
Swedfund will also contribute by improving the environmental, social and governance processes of the fund in relation to its borrowers.