d.light secures $125m funding to meet Africa’s increasing renewable energy demands

The global provider of transformational household products and affordable finance for low-income households, d.light has gone to make an announcement that it has secured a $30 million securitization facility from the Eastern and Southern African Trade and Development Bank Group (TDB Group), with the capability to purchase up to $125 million of receivable assets.

The company is going to be using the capital to increase its existing securitized financing facility in Tanzania and scale up its low-cost Pay-Go personal finance service in the country so that more low-income people and households are able to purchase the company’s affordable, solar-powered household products.

Nick Imudia who is the CEO for d.light, also gave a revelation that the new financing from TDB gives them the extra funding to reach more low-income families and households in Tanzania through their Pay-Go business, in a way that is affordable for their customers and sustainable for their business.

The company, alongside their lending partners are long-time pioneers in developing securitized finance as an innovative, scalable financing model for raising equity for off-grid solar that is guaranteed against current and future customer sales. d.light mentioned that it has managed to successfully used the securitization model for several years in Kenya and now they, together with their partners are expanding it to Tanzania.

Imudia also went on to mention that as a scalable method of financing, securitization is an important fiscal tool to help African countries achieve the United Nations’ Sustainable Development Goals for energy access. People can expect further expansion of this facility by d.light into other major sub-Saharan African markets during the year 2023.

At the current moment, d.light has raised $490 million in total securitized financing since 2020. The financing facility in Tanzania will be anchored by TDB.

The CEO of TDB, Michael Awori said that access to energy is critical to the sustainable development of the continent, especially for the most vulnerable off-grid communities. He said they are delighted to extend this second facility to d.light, this time in Tanzania.

He added by saying: “In 2022 alone the company reached over 1,677,216 people globally through the PAY-GO model. It also created close to 2,000 jobs and averted 1,329,371 tons of CO2 and black carbon emissions with solar replacing kerosene lamps. This is the kind of impactful track record TDB is keen to support.”

Tanzania is ranking as the fifth most populous country in Africa, and its population of 63.6 million people is spread out over a wide geographical area. According to the World Bank, only 40 per cent of the population has electricity access: the majority currently don’t have grid connectivity and a reliable power supply.

One of d.light’s first markets was Tanzania and it has been selling its products there since 2008, a year after the company was founded. The company has an office in Arusha City, Tanzania, that employs over 50 full-time employees. How their finance facility in Tanzania works, is that it leverages the payments of d.light’s existing and future customers there for solar products purchased using its Pay-Go service.

Imudia also went on to explain how d.light’s distribution and after-sales service network is serving as some of the most remote and hardest-to-reach areas of Tanzania. Imuda said the company will be continuing to grow their distribution footprint to enable more communities to benefit from their range of safe, reliable, and affordable solar-powered products.

It was back in April when d.light managed to achieve the great milestone of transforming the lives of more than 150 million people worldwide with its range of reliable, affordable solar-powered household products. d.light together with its lending partner African Frontier Capital (AFC) are going to be using the incoming capital as the basis for a new financing vehicle, Brighter Life Tanzania 1 Limited (BLT1).