d.light, a provider of transformational household products and affordable finance for low-income households, has secured a significant $7.4 million (N10 billion) securitized financing facility. This financial boost, announced in partnership with Chapel Hill Denham, Nigeria’s leading alternative asset manager, was revealed yesterday.
The funding, courtesy of Chapel Hill Denham’s Nigeria Infrastructure Debt Fund, aims to expand d.light’s Pay-Go model, which offers affordable, solar-powered products to low-income households.
African Frontier Capital played a pivotal role in structuring the financing, serving as both the transaction’s sponsor and the master and backup servicer.
Nick Imudia, d.light’s CEO, expressed his enthusiasm about the deal, stating, “This landmark financing significantly enhances our ability to bring solar-powered household goods to more low-income families in Nigeria, offering them an affordable and sustainable solution.”
d.light boasts a successful history with securitized finance across other Sub-Saharan African countries, leveraging it as a dynamic and scalable method to raise equity for off-grid solar projects, backed by both present and future customer sales. The company is now extending this proven model to Nigeria to enhance its operations. “In Chapel Hill Denham, we’ve found a partner that’s not only sharp in business but also deeply committed to sustainable development,” he further noted.
Established in 2007 by Canadians Ned Tozun and American Sam Goldman, who crossed paths at Stanford Business School, d.light has expanded its reach to over 70 markets worldwide. The company reports nearly 30 million products sold, ranging from solar lanterns and home systems to TVs, radios, and smartphones, positively affecting over 150 million individuals.
Chapel Hill Denham (CHD) stands as a pillar in the African financial sector, renowned as Nigeria’s premier independent investment bank. It holds a distinguished position as a top investment manager and excels in alternative asset management.
The firm’s investment focus is geared towards fostering Nigeria and Africa’s economic growth, with an emphasis on Infrastructure and Climate, Real Estate (including Student Accommodation and Affordable Housing), Gender SMEs, Venture Capital, the Creative Industries, Healthcare, and Education.
Bolaji Balogun, CEO of Chapel Hill Denham, reflected on the significance of the transaction, stating it marks a critical advancement in sustainable infrastructure investment within Nigeria. He emphasized that it establishes a groundbreaking model for the renewable energy industry.
d.light revealed in August 2023 that it had obtained a $30 million securitization facility from the Eastern and Southern African Trade and Development Bank Group (TDB Group). This facility offers the potential to acquire up to $125 million in receivable assets, elevating d.light’s total possible securitized financing since 2020 to $490 million.
The company also witnessed a notable 41% increase in revenue during the first half of 2023. This surge is largely attributed to a remarkable 143% growth in d.light’s operations in Nigeria, which is both Africa’s most populous nation and its biggest economy. The expansion in Nigeria has been spurred by the introduction of a Pay-Go affordable personal finance service tailored to its solar inverter products and solar home systems.
What impact does this have?
Nigeria stands as Africa’s most populous country and its largest economy. The latest Energy Progress Report, compiled by authoritative bodies such as the International Renewable Energy Agency, the International Energy Agency, the UN, and the World Bank, pinpointed Nigeria as the nation with the highest number of individuals (approximately 86 million) lacking access to electricity. Moreover, even those with grid connections often face unreliable power supply.
Furthermore, nearly 80% of Nigeria’s electricity generation is attributed to GHG-emitting thermal sources, highlighting an urgent need for a shift towards clean and dependable energy alternatives. d.light, in collaboration with Chapel Hill Denham, is at the forefront of facilitating this vital energy transition, offering innovative products and financing solutions to address the challenge.
