Energy 4 Impact backs first manufacturer guarantee with Fosera
Debt crowdfunding platform TRINE launched a campaign to fund a loan to Kenyan solar home system distributor Pawame. The EUR 150,000 ($177,000) loan is to finance pay-as-you-go solar home systems from Fosera and will provide 6,513 people with electricity.
Energy 4 Impact and German solar manufacturer Fosera will provide a co-guarantee on the loan, representing 50% of the loan value. The guarantee is designed to protect crowdfunding lenders in the case of loan default. The guarantee represents the first of this kind in the off-grid energy space. Energy 4 Impact is providing the guarantee under the Crowd Power programme, established in April 2015 to test different interventions in energy access related crowdfunding.
Pawame has been active in Kenya since May 2016 and raised $50,000 on debt crowdfunding platform Kiva in April 2017, inclusive of $10,000 in match funding from the Crowd Power programme. Pawame has grown quickly since entering the Kenyan market last year and has installed 2,000 systems.
The co-guarantee provided by Fosera and Energy 4 Impact will guarantee up to 50% of the loan value ($88,500) on a declining balance basis, so the value of the guarantee will reduce as the loan is repaid by the borrower (and the 50% guarantee will be applied to the outstanding balance).
This co-guarantee is an important step for the off-grid energy sector, particularly companies in their earlier stages of growth, as it shows that there are alternatives to a paralysing working capital bind. We also hope to showcase what can happen when we think outside the square and involve multiple players in the industry. Stakeholders in the off-grid energy sector need to work together to tackle the financing challenges faced by off-grid energy businesses.
Davinia Cogan, Energy 4 Impact
Swedish crowdfunding platform TRINE partnered with Energy 4 Impact under the Crowd Power programme in 2015. TRINE is a debt crowdfunding platform focused exclusively on the off-grid solar market in Africa. This is the eighth campaign Crowd Power has supported on the platform.