8 March, 2021 Member article

ARE Member SunFunder completes capital raise for Solar Energy Transformation Fund

8 March 2021 – Solar investments help reduce emissions and improve energy access in Africa and Asia

ARE Member SunFunder, a finance company specialising in distributed solar in emerging markets, announces the final close of capital investments in the oversubscribed $70 million Solar Energy Transformation (SET) Fund.

The fund was completed with an investment by OeEB, the development bank of Austria, joining other institutional, impact, foundation and individual investors in the blended finance vehicle. Its focus is on distributed solar and storage investments in Africa and Asia that help to mitigate climate change and improve energy access.

As well as OeEB, the SET Fund has received investments from Swedfund, Bank of America, Mercy Investment Services, The Schmidt Family Foundation and several individual investors, including from the Toniic impact investor network. They joined anchor first close investors the US Development Finance Corporation (DFC), Calvert Impact Capital, Ceniarth and the IKEA Foundation.

Ryan Levinson, CEO of SunFunder, said: “We are so grateful to our new investor partners who believed in us and worked so hard to close the SET Fund, especially during a year with so many new challenges and uncertainties. Thanks are also due to our anchor investors who have now made repeat investments in our work over the years. We look forward to building on these new and existing partnerships as we expand our climate and energy access investments through SET and beyond.”

Sabine Gaber, member of OeEB’s Executive Board, said: “Increasing access to energy while at the same time protecting our climate is a precondition for sustainable development and at the heart of OeEB’s strategy. Off-grid solutions have played a critical role in delivering clean, affordable and reliable energy, especially to rural populations. We are therefore proud to team up with SunFunder – an impact-driven and experienced partner in this field – and to back this innovative fund which improves access to energy for millions of people.”

Dan Letendre, managing director for environmental, social and governance at Bank of America, said: “This investment addresses the critical need for access to affordable, clean energy in emerging markets, and helps to unlock capital that is needed to realise global commitments on climate change. The investment is part of our Blended Finance Catalyst Pool and broader sustainable finance initiatives, which are helping to advance the United Nations Sustainable Development Goals.”

Jamie Dean, director of The Schmidt Family Foundation’s impact investing programme, said: “Access to energy is a fundamental human right. We believe SunFunder’s solar financing provides vital investment in off-grid clean energy systems, especially in places that depend heavily on diesel generators or have no power at all. Developing clean, reliable, power sources helps local businesses, creates job opportunities, and leads to healthier outcomes for communities and the environment by reducing harmful emissions.”

Sarah Smith, director of Mercy Partnership Fund, Mercy Investment Services’ global community investing programme, said: “SunFunder’s financing to expand access to clean, reliable energy to those living beyond the grid is having lifechanging impacts for families across Africa. Not only does it create environmental and health benefits, but families are able to redirect energy savings to food, education and health care. These impacts closely align with Mercy Investment Services’ commitment to care for the Earth and support the health and well-being of our global community. We’re pleased that our partnership with SunFunder allows us to positively impact families and communities.”

Dario Parziale, Director of Investment Research and Analysis at Toniic, said: “Toniic members learned of SunFunder’s SET Fund through our Climate Impact Working Group, a member-led forum to share investment insights, strategies, and investment opportunities with transformative potential for climate change mitigation and adaptation. The SET Fund was considered one of the most transformative opportunities to enable access to clean energy in frontier markets, and the interested members of the Climate Working Group swiftly moved a collaborative due diligence process that led to a co-investment in January 2021.”

Maria Håkansson, CEO of Swedfund, said: “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.”

In addition to its fund commitment, DFC is also a risk tool partner of the SET Fund, alongside Sida and MFX Solutions.

Since 2013, SunFunder has built an extensive track record of distributed solar investments in emerging markets, with a focus on sub-Saharan Africa. SunFunder’s team, largely based in Nairobi, Kenya, has closed over $140 million for 56 companies in 23 countries. Their off-grid, mini-grid, commercial and industrial (C&I) solar, telecom tower solarisation, productive use and agri-solar investments have directly improved energy access for 8 million people and mitigate 750,000 tonnes of CO2e emissions annually.

It should be highlighted, especially on International Women’s Day, that energy access brings particularly high socio-economic development impacts for women and girls. SunFunder is itself a proponent of gender-lens investing, having been co-founded by Chief Commercial Officer Audrey Desiderato and with women comprising 43% of its team and 40% of its board. DFC’s SET Fund investment qualified under the G7’s 2X Global Women’s Initiative and SunFunder has featured in Calvert Impact Capital’s pioneering work on gender-lens investing.

SunFunder was recently recognized again on the ImpactAssets 50 list of leading impact fund managers for delivering environmental, social and economic impact.