A catalytic collaboration with IKEA Foundation and SunFunder made possible the first close of the Solar Energy Transformation (SET) Fund. The first-loss capital from Shine Campaign co-founder IKEA Foundation, was indispensable in enabling SunFunder to leverage $42.5m in commitments.
“The IKEA Foundation is granting SunFunder €5.4 million [$6.1m USD] because we believe that helping families access renewable energy will enable them to afford a better everyday life while also protecting the planet,” said Jolanda van Ginkel, IKEA Foundation Programme Manager – Renewable Energy.
SunFunder, the Shine Campaign’s newest partner, is a pioneer in offering debt financing for off-grid residential solar companies in emerging markets. The solar energy finance business has deployed $65m of debt financing to 46 solar borrowers in Africa and Asia, directly improving access to clean energy for over 5m people while mitigating more than 450k tons of CO2 emissions annually.
The new SET Fund will help provide critical access to renewable energy for off-grid communities in East and West Africa. SunFunder will seek additional grant capital to close the second half of its $85m fund.
At the recent Powering Africa Summit, investors and energy sector leaders cited SunFunder’s SET Fund and Ikea Foundation’s first loss capital grant as a positive example of collaboration that unlocked a sizeable investment by OPIC. By working with early-stage solar companies that have the fewest funding options, SunFunder provides smaller loans that allow regional companies to grow and build a track record, while Ikea Foundation’s catalytic investment can have as much as a 10-20X multiplier effect on unlocking additional capital by others.
“This is exactly the type of collaboration the Shine Campaign works to facilitate and champion – and a perfect example of the leadership we need to get access to clean, affordable and reliable energy to the last mile,” said Mark Correnti, Shine Campaign Investments Managing Director.