SolarNow B.V. 3
With EUR 150,000 SolarNow is able to acquire and sell 250 solar home systems to families and businesses in Kisumu.
- Direct investment
- 8 new jobs
- 1675 people reached
- 250 solar systems installed
- 308 tons of CO2 reduced
IMPORTANT NOTE: high risk product - direct loan to solar power product distribution company. No local partner in between to cover risks.
Issuer: SolarNow B.V.
Amount: 150,000 (senior debt)
Maturity: 24 months, semi-annually and linearly amortizing
Interest rate: 6% p.a.
Non-recall period: N.A. issuer is allowed to repay the loan early at all times against a 2% penalty fee on the amount prepaid. In case the company sells more than 50% of its shares, no penalty fee will apply if prepayment occures.
This is a direct loan to a company (rather than lending to a financial institution) and therefore it is recommendable that you are careful with the amount you will invest.
- Due diligence partners:
- InRisc: credit analysis write up (download here)
- Credit Safe: basic compliance checks
- SolarNow Business Presentation (download here)
SolarNow B.V. supports access to energy for low income Africans in the rural areas of Sub-Saharan Africa. Founded in the Netherlands and with its HQ in Uganda, SolarNow’s primary activity is to sell and distribute high-quality modular solar photovoltaic home systems in combination with an end-user credit facility.
The company makes solar energy accessible and affordable to millions of off-grid people in Africa by taking a large scale and systematic approach. Operations started in Uganda in May 2011, building on management’s 7-year experience with the award winning Dutch Rural Energy Foundation training hundreds of rural entrepreneurs across Africa to develop solar energy enterprises and recognizing the potential in Uganda to develop a scalable commercial business. SolarNow has since then sold over 14,000 systems to approximately 4,500 entrepreneurs and 9,500 households. The Ugandan distribution network is strong and growing, with increasing levels of repeat orders from existing customers.
Client repayment performance is excellent with low delinquencies and minimal write offs (less than 1% of total volume disbursed i.e. USD 14 million to date). Large-scale international sourcing delivered significant cost reductions, with further margin improvements projected for 2017. The Company is constantly broadening the product range with DC appliances to satisfy the needs of its customers. The Company attracted three strong and reputable equity partners who have invested USD 5.5 million in SolarNow B.V. to date. The company is preparing a large equity round for Q2-2017 to fuel its expansion plan in Uganda and Kenya. The company expects its core operations in Uganda to be cash flow positive by mid 2017. This loan is specifically meant for Kenia.
SolarNow provides larger home systems and income generating appliances that facilitate greater entrepreneurial activity. Systems consist of solar panels, batteries and a broad range of appliances, including lights, radios, televisions, fridges, flat irons and more. Around 65% of the systems are being used for household purposes (lighting, television, cooling) and 35% are being used by businesses, schools and clinics (to extend opening hours, power small appliances, cooling of medicines, etc.). The systems are modular and can be upgraded over time. With a client satisfaction score of 99%, it is not surprising that 40% of all clients upgrade their products within 2 years after they buy the first system.
Clients pay for their systems in 24 months. This makes the products affordable. Also, SolarNow gives a unique 5-year warranty and free service on its products. The lifetime of the systems is 20 years, although clients need to replace the batteries after 4-6 years, depending on the use. An average system costs USD850, with the cheapest systems starting at USD 340.
SolarNow is growing fast with 45 branches and 470 employees in Uganda and, starting January 2017, Kenya. This project on the Lendahand website allows the company to buy an additional container of around 250 solar home systems to meet the growing demand in Kisumu, Kenya. The repayment of the project matches the payment pattern of the underlying client portfolio.
Solar home systems change lives. Not only do they reduce the energy expenses of off-grid households; they also improve the access to information for rural families, as they can charge their phones, watch television or even connect to the internet, which stimulates development, equality, education and even democratization. An even higher impact is achieved by the productive systems. Apart from increasing the income of entrepreneurs, this contributes to creating employment, economic development and even food security.
Meet Mary, a hairdresser who used to spend around $1 per day on blades every day, providing an inefficient and unpleasant service. A SolarNow system with 2 electric clippers costs her $24 per month and enabled 30% more shaves per day. Her monthly net income increased from $119 to $162. In 2 years, she will have finished payment and earn even more.
Vision & Mission of SolarNow:
Transform the lives of East Africans
We want to transform the lives of East Africans by being our clients’ energy partner for life. We aim to ensure every client continuously upgrades their system over time to include the latest SolarNow solutions for their home, farm, school, health centre or business. To achieve this, we promise to provide a wide and expanding choice of high quality solutions that our clients want and need.
Address the huge market need for energy in East Africa with quality solutions
We’re committed to addressing the huge unmet market need for energy in East Africa as an organisation focused on quality. For us, quality isn’t just about products. It’s about trust and relationships. We promise to be there for our clients in the moments that count: deciding to join our community, upgrading, referring family and friends and in the unlikely event something goes wrong.
Make quality solar accessible through affordable finance
We believe that access to finance is the key to spreading solar. This is why we’re committed to offering affordable and flexible credit with every solar solution. Our experience in providing financing with quality solar products is unparalleled in the Ugandan market. We aim to keep it that way and expand our presence in East Africa.
Willem Nolens (CEO) - Willem has over 19 years experience in establishing and managing social enterprises in Africa, in particular in the field of microfinance and renewables. In 2001, Willem co-founded ProCredit Bank Ghana and then later became the MD. He also co-founded Catalyst Microfinance Investors (CMI), a USD 100m private equity fund investing in microfinance Institutions in Africa and Asia and from that co-founded ASA International, a network of Greenfield MFIs. In 2010, Willem transformed the award-winning Rural Energy Foundation into SolarNow and has served as CEO since its inception.
Peter Huisman (CTO) - Peter is an electrical engineer and research & development professional with over 12 years of experience. Peter began his career as a researcher at TNO, a Dutch research organization that believes in the joint creation of economic and social value. In 2009, Peter formed part of the original team at the Rural Energy Foundation (REF) as Country Coordinator in Tanzania. Since the transformation of REF into SolarNow, Peter has been in charge of a variety of functions from its very beginnings across R&D, IT, Operations, Finance and Logistics.
Ronald Schuurhuizen (CCO) - Ronald is the longest serving employee of SolarNow with over eleven years of experience in solar energy market development in Africa. Ronald was the Regional Coordination for East Africa whilst at the Rural Energy Foundation, managing teams throughout Sudan, Ethiopia, Uganda, Tanzania, Zambia and Mozambique implementing a market development strategy for solar and renewable energy technology diffusion. Since SolarNow’s inception in 2011, co-founder Ronald has held a variety of roles across Sales, Marketing, Operations, International Sourcing, Business Development, General Management, and is currently the Commercial Director.
Andreas Rosenau (CFO) - Andreas is a finance professional with over 15 years of experience across financial control and asset management. He was born in Germany and started his career in banking and as financial controller in Germany and Eastern Europe. He then moved to Asia working with Procter & Gamble as a financial controller, establishing a new business in Taiwan. Completing his MBA studies in Australia, he then worked in asset management, particularly for pension funds and individual investors. In 2015, Andreas worked as a financial consultant in South Africa and has enjoyed travelling and exploring the region.
Austin Harris (COO) - Austin Harris is a finance, strategy and operations professional with over 13 years of experience. He has now been living and working in East Africa for over 5 years. He began his career in Mergers & Acquisitions, and then Corporate Banking ranging from startup ventures to Citigroup as well as development projects with the UNDP. He transitioned from corporate banking into microfinance which took him to Bangladesh and Rwanda. A Skoll Scholar, he completed his MBA at Oxford Said Business School and most recently worked for Off Grid Electric in Tanzania and Rwanda.
John Kizito (Risk Management) - John has over 20 years’ experience in accounting, auditing and tax law. He moved from Uganda to the US to complete his studies including a Masters Degrees in Accounting and Tax Law and worked for the United Nations as an Accountant. He then spent over 10 years working in Accounting and International Tax Law at Discovery Communications and a private Tax Law Practice before returning to Uganda to join SolarNow as head of Risk Management.
Picture of management
- In 2010 SolarNow was awarded the prestigous Ashden Award
- In 2011 the company won the EU Sustainable Energy Award
Previous realized projects: link to website
|Company name||SolarNow B.V. 3|
|Sector||Sustainable energy projects|
Impact of this project
- With this investment 8 jobs are created
- With this investment 1675 people are reached
- With this investment 250 solar home systems are installed
- With this investment 308 tons of CO2 are reduced
About the risks
What are the risks of investing money?
Our local partners cover the risk of currency exchange rates and loan defaults. They do this by maintaining financial reserves for this purpose . In addition, there is an option to claim their equity if needed. While these measures are intended to minimize the risk to funders, our local partners face risks of their own that could effect their ability to secure a loan. These include: - bankruptcy - currency exchange rates - fraud - operational risks - political and regulatory changes - natural disasters or epidemics.
If you invest direct in a company, hence not via a local partner, risks of default are not covered. As the risk that comes with direct lendings is generally higher than an investment through a local partner, the interest rate is also higher.
There is also some operational risk at Lendahand. An example might be that Lendahand is unable to find shareholders to finance their activities. In such a case, Lendahand will handle outstanding loans at the best of its ability. At the same time, our ability to legally address non-payment from local partners becomes understandably difficult.
How does Lendahand minimize the risks?
Local partners must adhere to our mission and work with us to provide loans that are affordable. This insures that local entrepreneurs have access to financing that allows them to grow their business. A local partner must also have a track record. In other words, they must have proven themselves as a meso-credit provider for SMEs. This means (for instance) that the partner must have a solid credit portfolio, along with enough buffers and equity to compensate for unexpected downturns. We also check the organizational structure of the partner and how robust their (internal) procedures are. Finally, the loans that a local partner receives via Lendahand must be in proportion to the partner's total balance sheet. A healthy balance between effectuating influence and independence is crucial. If you would like to receive more information on the financial indicators we employ, please contact us via firstname.lastname@example.org.
When currency exchange risks become too high for a local partner, Lendahand will urge the local partner to cover these risks. In some scenario's the local partner is contractually obliged to comply with these demands.
Lendahand will always conduct due diligence when a Company requests for a direct loan. To provide more insights on risks, an independent partie comes in to perform brief analysis on direct loans. The results can be downloaded on the project detail page of the direct loan. However, this analysis serves primarily as a tool for your own opinion and conclusion. Pay attention to the fact this analysis is not an investing advice.
Does Lendahand provide guarantee on the loans?
Normally we don't. Local partners take care of the repayment, even if (some) entrepreneurs are unable to do so themselves. If the local partner is for some reason unable to repay then there is a chance of partial or full loss of your money. For this reason Lendahand only selects financially solid partners based on strict criteria.
Also, for most direct loans no guarantee is provided. For these investments currency risks are covered however.
Sometimes - and only for some direct investments in Africa - our partner Sida, part of the Swedish government, will provide a guarantee with a maximum of 50%. If this is the case, it will be indicated explicitly.
Does Lendahand have a license or exemption?
Yes. The Dutch Authority Financial Markets (AFM) has provided Hands-on B.V. (with trade name 'Lendahand') in September 2016 with an investment firm license in accordance with article 2:96 of the Financial Markets Supervision Act (Wft). Placing orders on Lendahand's website is therefore an AFM regulated activity. Lendahand also meets its minimum capital requirements of EUR 125,000 following its license as required by De Nederlandsche Bank (DNB).
Lendahand uses an exemption from an approved prospectus that is available up to EUR 5 Million per year.
How safe are my personal details?
We adhere to strict safety requirements with regards to private and payment details. All sensitive data is sent through an encrypted connection (https). Also, data is stored (encrypted) in a secured facility provided by AWS: the world largest hosting service. Customer documents can only be retrieved by a secured connection and multi-factor authentication.
What happens if the local currency devaluates?
Our local partners and Companies bear the exchange rate risks. We settle the loan, redemptions, and interest payments in euro.
Does Lendahand use a third foundation fund?
What happens with my money if Lendahand goes bankrupt?
If Hands-On BV (containing the brand name Lendahand) would go bankrupt trades between Lendahand and payment service provider Intersolve EGI would cease immediately. Intersolve will then transfer the funds in your personal wallet to your bank account (Note: if at this time the project you have invested in has been fully funded and the money has thus been transferred to the local partner, these funds will not be transferred back to your bank account). Intersolve will then in consultation with a trustee handle all repayments between the investors and investees up until the final repayment of the last project has taken place.
Additionally, Lendahand is part of the investor compensation scheme (ICS). This scheme aims to compensate individuals and small businesses who have trusted money and or financial instruments (such as notes or options) to a licensed bank, investment firm or a financial institution in case the financial firm is unable to meet its obligations arising from claims related to the investment service (in other words, if Hands-On BV is not keeping track of the acquired notes by investors in the Wge depot correctly). The ICS guarantees an amount of up to EUR 20,000 per individual. For more information, go to www.toezicht.dnb.nl/en/2/50-202210
Why is my money going via Intersolve EGI?
What happens when a local partner goes bankrupt?
|Revenue (per year)||€1,269,157|
|Equity / total assets||12.00%|