Africa’s Off-Grid Solar Companies Are Turning Customer Payments Into Investment Assets

Africa’s off-grid solar industry is beginning to attract a different class of capital. Instead of relying only on grants, concessional loans and development-finance facilities, some of the continent’s largest pay-as-you-go solar companies are increasingly using customer repayment portfolios to raise money from commercial investors.

The shift is significant because it changes how energy-access businesses are financed. Under the pay-as-you-go model, customers typically acquire solar home systems, appliances or smartphones through instalments paid over time. Those expected repayments can be pooled, assessed and used to support bonds or securitised debt. The resulting capital can then be recycled into new customer connections.

Sun King said in June that sustainable financing instruments had supported roughly one in three of the products it deployed since launching its Sustainable Financing Framework in 2023. The company said local-currency securitisations and other debt facilities were helping it expand access while reducing currency risk. In a separate 2025 transaction, Sun King closed a $156 million Kenyan-shilling securitisation backed by commercial banks and development-finance institutions. The company said the deal was expected to finance about 1.4 million solar products and smartphones in Kenya.

d.light has followed a similar path. The company said in June 2026 that its securitisation platform had reached $1 billion in cumulative purchasing capacity after launching what it described as Africa’s first public green bond backed by off-grid solar receivables. That milestone followed earlier receivables-financing structures developed in Kenya, Nigeria, Tanzania and other markets.

Why repayment data matters

These transactions depend on more than demand for solar products. Investors need evidence that customers repay reliably, that the underlying contracts are enforceable and that the systems used to collect payments can generate consistent performance data.

For larger operators, years of repayment history and digital payment records can help make decentralised energy portfolios easier to evaluate. In effect, millions of small customer contracts are being translated into financial assets that institutional investors can understand.

This is important in a sector where companies often face a mismatch between the long period required to recover customer payments and the immediate capital needed to purchase inventory, expand distribution networks and provide after-sales support.

Local currency reduces one major risk

Local-currency structures are especially important. Many off-grid companies earn revenue in African currencies but borrow in dollars or euros. Sharp exchange-rate movements can therefore raise debt-service costs without increasing customer income.

Transactions denominated in local currency reduce that mismatch. They can also draw domestic banks, pension funds and capital-market investors into energy-access financing. Sun King’s Kenya securitisation included funding from Absa, Citi, Co-operative Bank of Kenya, KCB Bank and Stanbic Bank Kenya, alongside development-finance institutions in the mezzanine tranche.

The model is not yet available to everyone

The emergence of securitisation does not mean the wider off-grid solar sector has solved its financing problem. Smaller firms may lack the scale, data systems, credit enhancements and transaction capacity required to structure similar deals.

These instruments are also not free from public support. Credit enhancement, guarantees and participation by development-finance institutions can still be essential to make transactions acceptable to commercial investors.

There is also a social question. Pressure to maintain predictable repayment performance could encourage companies to focus on customers who present lower credit risk, even though the households most in need of energy access may have irregular incomes. The test is whether structured finance can expand affordability rather than narrow access.

A new stage for distributed energy finance

The wider significance is that off-grid solar is being treated less as a small donor-supported niche and more as an infrastructure asset class with measurable cash flows. That could unlock larger pools of capital for energy access, provided transparency, consumer protection and responsible lending remain central to the model.

For African governments and regulators, the development also raises policy questions around securitisation rules, data protection, credit reporting, consumer rights and the role of domestic institutional investors in climate finance.

Sources

• Sun King: Sustainable Finance Drives Rapid Expansion of Off-Grid Solar in Africa
• Sun King: $156 Million Securitisation to Deliver Solar for More Than One Million Kenyans
• d.light press releases, including its June 2026 securitisation milestone
• Associated Press: Africa’s off-grid solar sector courts mainstream investors