Finnfund and Norfund have doubled West African energy provider Starsight’s senior debt facility from $10 million to $20 million.
This new funding will enable the solar power company to continue offering its energy-as-a-service hybrid solar solutions to commercial and industrial (C&I) customers in Nigeria and Ghana.
Starsight, Finnfund and Norfund closed the original $10 million facility in June 2019. Starsight also successfully closed an N3.6 billion ($9.2m) senior debt facility at the end of 2020 with Chapel Hill Denham Nigeria Infrastructure Debt Fund. That marked the first time a solar power-based energy company in Nigeria was successfully backed by long-term Naira financing.
Since the initial $10 million senior debt facility agreement of 2019, Starsight has expanded its portfolio to more than 500 sites, 36MW of installed generating capacity and 28MWh of storage capacity across Nigeria and Ghana. Starsight clients benefit from the company’s end-to-end service, 99% uptime guarantee and free capex, while making their businesses green and sustainable.
Tony Carr, Starsight CEO: “We are proud of our continued relationship with our partners at Finnfund and Norfund, and we value their confidence in Starsight’s world-class team, value offering and service reputation. As we expand from Nigeria to Ghana and beyond, this funding will be key to our ability to swiftly deploy hybrid-solar solutions to new C&I customers. Starsight is uniquely positioned to remain a market leader thanks to this backing from the Nordic DFIs, as well as our equity investors Helios Investment Partners and Africa Infrastructure Investment Managers.”
The Nordic DFI investment in Starsight follows an announcement by Danish DFI, Investment Fund for Developing Countries, of a Series B investment of $38 million into another West African hybrid solar company, Daystar Power.
Solar for Nigerian C&I market is expanding rapidly
Like most of sub-Saharan Africa, Nigeria’s C&I market has been ripe for exploitation by solar energy provides for a while now. Power Africa says Nigeria has the potential to generate 12,522MW of electricity but most days they only produce around 4,000MW.
A 2019 Bloomberg NEF report about the uptake of solar energy into the sub-Saharan African C&I market pointed out that high electricity tariffs, falling PV prices and a lack of grid reliability across the region was growing sale of on-site solar to business customers. The report, Solar for Business in Sub-Saharan African, posited that the C&I market across the region was growing, not because of legal and regulatory support but because of economics. Onsite solar power is cheaper than electricity tariffs paid by C&I clients in half the markets mentioned in the report.
Lockdowns caused by the COVID-19 pandemic have seriously disrupted the world’s energy sector though and the International Energy Agency in its World Energy Report 2020 said they could not yet tell how the crises would affect the clean energy transition in the short term. Solar energy though was consistently at the heart of every possible scenario it painted about what could happen over the next decade.
That IEA report noted that solar projects consistently offer some of the lowest- cost electricity ever and would be the main driver of growth of power projects to meet global electricity needs in the foreseeable future.
Eero Pekkanen, Finfund senior investment manager: “Starsight has succeeded in building a well-functioning model by providing cleaner, cheaper and more reliable electricity to clients across Nigeria and Ghana. It has been a delight to see the company grow from a pioneer in the C&I field to a market leader inspiring the whole industry.”