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FMO is the lead arranger in a total USD 15.5 million financing package that will grow Kingo’s services with around 250,000 people that are not connected to the electricity grid in rural parts of Guatemala. These people now get access to clean off-grid energy through the supply of rooftop solar panels. Kingo currently reaches over 300,000 people with their services and FMO’s syndicate will allow the company to reach a total of 550,000.
The financing is for Guatemalan solar panel market leader Solesco Centroamérica (brand name Kingo). The loans will be used for organizational growth and the acquisition and installation of new solar rooftop panels in Guatemala. The roll-out will take place this year and early 2019.
Linda Broekhuizen, chief investment officer at FMO, said: “The syndicated loan allows Kingo to grow further and bring electricity to approximately 550,000 people in Guatemala that don’t have a reliable source of energy supply. This is clean and sustainable energy and consumers can actually save money, while remaining flexible in the amount they wish to spend.”
Kingo serves households that don’t have access to the central electricity grid. Shortages are the biggest in rural areas, where the electrification rate is only 40%. Targeted customers now rely heavily on burning kerosene, candles and paying charging fees for cell phones.
Clients acquire the energy services (panel, battery light bulbs and USB-port) on a full service rental basis. They can buy hours, weeks or months of energy services by buying ‘solar credits’ from local shopkeepers who will provide a special code to unlock the device – a system comparable with a prepaid phone.
“Kingo’s aim goes beyond eliminating energy poverty, and involves playing a spearheading role in the development of the rising billion. This financing will help Kingo advance towards its goals and the company will be closer to positively impacting 1 million households by 2020,” said Kingo CEO and Co-founder, Juan Fermín Rodriguez.
Bart van Eyk, Oikocredit’s Director of Investments, said: “With this partnership we support an experienced off-grid energy supplier expand to rural areas in Guatemala that are very difficult for electricity suppliers to reach. We recognise the urgent need for rural households to improve their living conditions through access to reliable energy sources, which is why Kingo’s off-grid energy service is crucial. This is very much at the heart of Oikocredit’s mission to improve the livelihoods of lower income people and communities.”
The FMO-arranged senior loan will consist of USD 5 million from FMO, USD 5 million from social impact investor Oikocredit and USD 5.5 million subordinated loan from the Infrastructure Development Fund, currently managed by FMO. The tenor of the loan is seven years. Kingo borrows the money in its local currency, the Guatemalan quetzal.
Social impact investor and worldwide cooperative Oikocredit has over 40 years’ experience funding organisations active in financial inclusion, agriculture and renewable energy. Oikocredit’s loans, equity investments and capacity building aim to enable people on low incomes in Africa, Asia and Latin America to sustainably improve their living standards. Oikocredit finances over 700 partners in over 70 countries, with total outstanding capital of € 980 million. www.oikocredit.coop
Founded in Guatemala in 2013 by Juan Fermín Rodriguez, Matias de Tezanos (CEO of PeopleFund), Alvaro Rodriguez, and Peter Kasprowicz; four entrepreneurs looking to improve human lives by providing clean, safe, off-grid electricity at a lower cost than existing alternatives. The Company's executive team includes experts in mass consumer markets, telecommunications, software, and energy. Since its founding, Kingo has raised $25.0 Million in several equity and debt rounds lead by prominent investors and institutions including the global pioneer in value added investments (PeopleFund),the largest utility in Europe (ENGIE Rassembleurs d'Energies), and the innovation fund of one of the largest utilities in Latin America (FCP, from EPM). Kingo has also raised funds from the Dutch Development Bank (FMO), the French Development Bank (Proparco) and the Inter-American Development Bank (IDB); all of whom are looking to provide serious amounts of debt in the next years for Kingo’s global expansion and technology developments. Other key partners include Leonardo DiCaprio, who has joined the Company as an investor and Advisor, and Peter Diamandis’ XPRIZE Foundation. Kingo has also partnered with award-winning agency network Ogilvy & Mather, through its Colombia & Guatemala offices, to launch Kingo’s traction and vision to the world. Kingo delivers its prepaid energy service using robust and intelligent proprietary technology. This includes its smart energy systems called Kingos and its cloud-based suite of data management software. With Kingo's prepaid solar energy service, users can readily and inexpensively access tools that enhance their productivity, connectivity, and overall wellbeing. For more information visit: http://www.kingoenergy.com