A San Francisco-based crowd sourcing solar financing start-up yesterday announced a new programme with a UK solar products supplier to developing countries after last week announcing that it had repaid its first loan to investors within just nine months.
SunFunder, which funds solar projects in developing countries, was established less than a year ago. On Monday, it closed a $250,000 master loan programme with SunnyMoney, the leading seller of solar lights in Africa.
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“It's a great example of how we develop strong long-term partnerships with solar businesses and help them scale-up over time,” said founder Ryan Levinson.
SunFunder has already fully funded three projects with SunnyMoney through an initial US$50,000 master loan. But the new programme will support SunnyMoney's goal to install solar lights in every unelectrified school in Tanzania.
On May 1, the company also announced that its first loan was 100% repaid after launching the project on its website only nine months ago.
Its partnership with Hybrid Social Solutions now supplies affordable solar energy to power lights and mobile phones for 100 families in Palawan, Philippines.
The project only required $4,000 in funding, but the repayment of the loan is a major milestone for SunFunder and a proof point for the emergence of crowdsourced capital to invest in solar projects.
Levinson said: “This demonstrates you can make loans as short as nine months and solar energy to people that's affordable and have it following a commercially viable model.”
SunFunder's projects target rural and un-electrified regions where distributed solar electricity has the greatest impact, but would otherwise not attract the interest of large institutional investors.
“Solar DG is perfect for areas where there's no existing grid infrastructure. That's exactly what the market needs in these very remote rural areas. That means the types of technologies and the projects are quite small sometimes so the financing that some of these companies need often isn't in the tens of millions of dollars but it's also not financing for end user consumers. So you need something in the middle, that's what we're providing.”
Financial regulations restrict investors from receiving interest, but they can withdraw their principal and re-invest their interest into further projects. But the company aims to attract more than $1bn of capital into affordable solar energy by the end of this decade. To reach that goal, SunFunder will look beyond its crowdfunders who are largely unaccredited investors, said Levinson.
“We're also now starting to talk to other types of investors beyond the crowd which is important for our model in terms of how we grow and scale. We expect to raise capital from larger impact investment institutions and foundations and government entities to fund projects directly as well.”
In March, SunFunder won a $25,000 Facebook and Cleantech Group prize to develop an app that shows progress on metrics like dollars invested, number of projects, people helped and energy saved and will even connect investors with end-users.