M-KOPA (Kenya)

Our investment will help to finance sales growth, by providing debt capital to fund M-KOPA’s receivables book for PAYGo solar home system products, enabling more affordable access to energy services and unbanked customers to establish credit histories.

Our investment will also finance sales growth by providing debt capital to fund M-KOPA’s PAYGo phones product, enabling more affordable access to smartphones and mobile internet.

Kenya

Solar home system consumers are peri-urban/rural consumers earning a median daily income of KES 18,000 ($5.40). 80 per cent of current solar customers are low-income, earning $2-3 per day.

Kenya

Mobile phone customers are mostly peri-urban/rural consumers earning a median daily income of KES 395 ($3.60). Average income for customers previously owning a feature phone is $3 per day while those previously owning a smartphone earn on average $4.50 a day.

The most recent investment will reach 179,000 new households through solar home system sales. This would bring total households with new energy access to 983,000.

The new investment will also reach 423,000 new phone customers. This would bring the total customers reached to 601,000. As M-KOPA is a first mover in the PAYGo phone business, rigorous benchmarks are not yet available.

Expected to be deep as 80 per cent of M-KOPA’s PAYGo solar home system customers did not previously have electricity access, and 60 per cent of phone customers are accessing mobile internet for the first time.

• Market: The off-grid solar (OGS) market remains nascent with the industry still pre-profit. PAYGo financing for phones is a new model with M-KOPA as the first mover but is expected to become increasingly competitive.

• Financial: We are providing local currency debt financing, which is not available at scale as commercial lenders are reluctant to enter the nascent OGS sector, and the cost of capital is often prohibitively expensive.

• Execution risk: Relates to the risk that M-KOPA is unable to expand its receivables portfolio across solar home system and phone product lines at the expected rate and thus deliver impact. This is directly correlated with commercial risk.

• Execution risk: Relates to the risk that a higher proportion of M-KOPA’s phone customers will be existing smartphone users than expected, which will result in lower than predicted depth of impact for expanding access to mobile internet. Considered low risk given that lower-income consumers are more likely to be targeted as the product line expands.