GuarantCo and SBM Bank guarantee $15 million for Bboxx solar kits in Kenya
26 January 2022 – GuarantCo, a Private Infrastructure Development Group (PIDG) company is teaming up with Kenyan commercial bank SBM Bank to provide a KSh1.6 billion (about $15 million) credit facility to Bboxx's Kenyan subsidiary.
The Kenyan subsidiary of UK-based Bboxx has been granted a 1.6 billion Kenyan shillings (about $15 million) credit facility to boost its operations in Kenya. The local currency facility is provided by GuarantCo, a Private Infrastructure Development Group (PIDG) company, and SBM Bank, a commercial bank, a subsidiary of SBM Group Holdings based in Mauritius.
GuarantCo has supported the transaction with a partial credit guarantee of Kshs 1.2 billion ($11.25 million) for 75% of the loan facility. This loan is intended to finance electrification via the solar home systems that Bboxx distributes in Kenya. Specifically, its local subsidiary will use the credit line to purchase new stock over the next two years.
Access to electricity for 470,000 Kenyans
GuarantCo estimates that the line of credit in local currency will provide 89,600 solar home systems, refrigerators and telephones. The equipment is expected to provide access to electricity for at least 470,000 Kenyans.
“Typically, investments in the African solar home systems sector are made in hard currency, which can expose companies to significant foreign exchange risks. By mobilizing a local bank, the guarantee will match the currency of the financing needs with the operations and thus contribute to the overall sustainability of the business,” says the Layth Al-Falaki-led company.
The financing will enable Bboxx to boost its operations in Kenya, where it operates mainly in rural areas. With 350 employees, its local subsidiary claims 300,000 customers. This will have a positive impact in Kenya, where the government is counting on universal access to electricity by the end of 2022. However, it is not certain that this deadline will be met. Currently, Kenya has an electricity access rate of 100% in urban areas and 65.7% in rural areas, according to Power Africa. It is therefore one of the most advanced countries in sub-Saharan Africa in terms of electrification.