Sollatek Electronics Kenya 2

With EUR 100,000 Sollatek can provide 2,000 solar lanterns and 200 solar home systems to households and companies.

  • CountryKeKenya
  • TypeDirect investment
  • IssuerSollatek
  • Amount€100,000
  • Annual interest5.50%
  • Maturity36 Months
  • CurrencyEUR
  • 5 new jobs
  • 10750 people reached
  • 1150 solar systems installed
  • 237 tons of CO2 reduced
100%

Fully funded in 41 days.

IMPORTANT NOTE: high risk product - direct loan to solar power product distribution company. No local partner in between to cover risks.

Basic info:

Issuer: Sollatek Electronics Kenya Ltd. 
Currency:  EUR 
Amount: 100,000
Maturity: 36 months, semi-annually and linearly amortizing 
Collateral: N.A.
Interest rate: 5.5% p.a. 

Direct loan

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. 

Documentation

Company Background

Sollatek Electronics Kenya Ltd is an East African leader in supplying clean reliable on and off grid energy solutions. We have been in operation since 1985 as the sole authorised agent for Sollatek products and the owner of the Sollatek franchise in East Africa. Our Head Office is in Mombasa, Kenya and sales office in Nairobi, Kenya. We operate as a wholesale and last mile distribution outfit, selling our products through a region-wide network of distributors, hardware, electronic shops, supermarkets, NGO and Co-operatives. We provide installation services, comprehensive after sales care and hassle free warranty services on all our products.

Our on-grid division supplies and installs voltage protection range includes voltage switchers, stabilisers, and uninterruptible power supplies (UPS).  These devices assist businesses from small to large avoid losses, monetary and efficiency, due to unreliable power by keep their businesses, homes, and lives working uninterrupted.

The Sollatek Solar Division supplies complete turnkey solar systems and ancillary equipment including solar energy systems, solar modules, charge controllers, batteries, solar home systems and portable lanterns. We offer a wide range of affordable and quality product to cater to all the different financial capabilities of end users in Kenya.

As a Company we believe in access to affordable clean energy for all. Currently only 12.6% of Kenya’s rural population is connected to grid power. For the estimated 30 million people without a connection, solar energy is one of the most reliable and cost effective solutions. Beyond lack of access to grid power, 49% of the rural populations live at the poverty line as defined by the World Bank, which means they have limited or no disposable income for managing the high upfront costs of some solar solutions.

Since 2009, we have sold over 700,000 portable solar lanterns and solar home systems in East Africa. Through this more than 3.5 million people have gained access to clear renewable energy as a result of Sollatek’s activities. We continue to strive to provide clean and reliable energy for all.      

In recent years, Sollatek has won two grants pursing the goal of universal energy access, the USADF Power Africa Off-Grid Challenge for Sollatek Solar Centers. We installed 15 income generating solar centers to run cold storage facilities and lighting for fishing coops along the Kenyan Coast. This project was a finalist in the African Innovation Awards. In 2015, SEKL was awarded a grant from Energy and Environment Partnership (EEP) for setting up an solar entrepreneur network across Kenya to encourage last mile sales and distribution of portable solar lanterns and solar home systems.    

The Project (part II of II)

With this loan Sollatek will be able to provide 2,000 portable solar lanterns and 200 solar home system with energy efficient appliances which will translate into over 2,300 households or businesses that will have access to lighting, phone charging and running vital appliances.  This will contribute greatly to energy security, health, education and economic opportunities for under-served rural off-grid populations in Kenya. 

Also, 650 solar panels, batteries and charge controls can be purcahsed to complete between 200-300 solar projects. 

Sollatek works with three innovative solar manufactures to bring in a range of high quality and affordable solar products that match all the different needs and usages of the Kenyan population. The solar home systems will be sold to rural homes, offices, clinics, and community centers. This will also support our network of local distributors, which includes close to 50 local hardware, kiosks or electronics shops in all regions of Kenya. 

Impact

Direct benefits of the loan  

  • 2,300 homes and business with access to clean, affordable and reliable energy.
  • Estimated 11,500 individuals who will benefit from the use of solar energy products from lanterns to tailor-made solar systems.
  • Approximately 1,800 additional business hours per day for small shops, market traders, and entrepreneurs which translated to increase income.
  • 473.62 tonnes of CO2 Emission removed from the atmosphere as people switch from kerosene lanterns to solar.

Indirect benefits of the loan 

  • Improved performance at school as children have reliable lights for schoolwork at homes
  • Health benefits as kerosene lanterns are removed from indoors which fumes cause respiratory illnesses 
  • Increase incomes as both homes and business do not have to pay for electricity or phone charging 
  • Increase security for homes and night time activities 

Mission & Vision

To be the East African leader in voltage protection, renewable energy and energy saving industries with a primary focus on offering high quality, affordable, and innovative products and services to all our customers. 

Building on our over 30 years of experience working in East Africa as a wholesale and distribution company for power control & solar energy, we diversified into specialised solar projects, portable solar lanterns and home systems and innovative industrial power optimisation systems.

Management Team 

Mr. Chris R. Soper – Chairman       
Chris is a Chartered Shipbroker and a successful entrepreneur with over 40 years experience of running businesses in Kenya. Chris started in shipping but a chance meeting with Manhal Allos, Managing Director of Sollatek UK Limited, led to him starting up Sollatek Kenya in 1986 to sell voltage protection devices. In 1992, Chris became one of the first people in Kenya to explore business opportunities in renewable energy. Sollatek Kenya has since that time become a leading player in the solar industry.

Mohamed Saleem N. Abdulla—Managing Director 
Saleem is a certified accountant with over 25 years of accounting and management experience and over 20 years working with Sollatek.  Born and educated in Mombasa, he began his career at United Touring Company in Nairobi as the Group Credit Controlled. After 3 year with UTC, Saleem moved back to Mombasa to join Sollatek as the Accountant. Saleem has risen steadily through the ranks of the Company and was promoted to take over from Chris Soper as the Managing Director in 2007. Under his stewardship, Sollatek has doubled its turnover in the past 5 years.

Shemina S. Khodabaksh—Commercial Manager     
Shemina is a career administrator with over 20 years work experience in large commercial enterprise. Shemina started with The Aga Khan Hospital where she worked for over 15 years in various positions. She joined Sollatek in 2006. Shemina has been responsible for setting up and effective office management infrastructure, which has been invaluable for Sollatek, as the Company has grown rapidly in the recent years. She also spearheaded the Corporate Social Responsibility program for the past 5 years, and has been credited with many successful charitable activities organized by Sollatek.

Natalie Balck – Head of Projects and Partnerships 
Natalie was educated in the States and England holding a BA in psychology and MA in International Development. She has worked in Washington DC, England and Kenya in marketing, campaigns and with NGOs. For the last 7 years, she has been working with Sollatek Electronics Kenya Ltd, developing their region wide marketing strategy, fundraising and solar project implementation. She successfully managed the USADF Power Africa Solar Run Freezers for Fisherman project as well as EEP Sollatek Direct: Solar Entrepreneurs in Kenya.  

Samwel O. Odhiambo – Sales and Distribution Manager 
Sam was born and educated in Nairobi. After graduating with a Bachelor of Commerce degree from University of Nairobi in 1999, Sam joined Kenya Credit Traders Limited, a credit/HP firm as a Sales Executive. His strong work ethic and exceptional selling skills saw him promoted to be the Manager of the Company’s shop in Eldoret. Sam left KCTL to join Delmer, an electronic weighing and Telecommunications Company in 2001. He worked for Delmer for 6 years and had a short stint at Kenital Solar before joining Sollatek in April 2008. A brilliant salesman and an excellent administrator, Sam has not only played a key role in firmly establishing Sollatek in Kenya but also in expanding the business regionally into Uganda, Rwanda and Burundi.

Website

http://sollatek.co.ke/

Track Record of Awards 

2016 

Finalist in the Africa Innovation Awards in South Africa 

2015 

SEKL was named one of Kenya’s Top 100 Mid-Size companies in East Africa by KPMG Kenya. 

Awarded a grant from Energy and Environment Partnership (EEP) for setting up an solar entrepreneur network across Kenya 

Mazingira Award in Category of Green Energy Solution 

2014 

Winner of the USADF Power Africa Off-Grid Challenge of 100,000 USD for Sollatek Solar Centers. 

Winner of Energy, Solar and Lighting, Kenya Homes Expo 

2013 

SEKL was named one of 

Kenya’s Top 100 Mid-Size companies in East Africa by KPMG Kenya.

Previous Project 

USADF Power Africa Off-Grid Challenge

Energy and Environment Partnership (EEP) 

World Food Program Office in Isiolo, Kenya 

  • Company nameSollatek Electronics Kenya 2
  • OwnerSaleem Abdulla
  • Founded1985
  • LocationMombasa
  • SectorSustainable energy projects
  • Turnover€3,500,000
  • Employees54

Impact of this project

  • With this investment 5 jobs are created
  • With this investment 10750 people are reached
  • With this investment 1150 solar home systems are installed
  • With this investment 237 tons of CO2 are reduced

About the investment

  • TypeDirect investment
  • IssuerSollatek
  • Funding target€100,000
  • Annual interest5.50%
  • Maturity36 Months
  • Repayment periodSemiannually
  • CurrencyEUR

About the risks

What are the risks of lending money to entrepreneurs?

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 info@lendahand.com.

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?

No. 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 direct loans no guarantee is provided.

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 or in dollar.

Does Lendahand use a third foundation fund?

Lendahand works with LemonWay, a regulated payment service provider. Since LemonWay is a French company there is no 'Stichting Derdengelden' as such. However, LemonWay works in a similar manner and has a license from the French ACPR (Autorité de Contrôle Prudentiel et de Résolution). Your money will be deposited on a protected and secure bank account until the project you have invested in has been fully funded. LemonWay in no way has access to these funds. Once the project is fully funded, the money is transferred to the local partner or Company in question.

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 LemonWay would cease immediately. LemonWay 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). LemonWay 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. 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 to a payment service provider?

As part of the AFM license for investment firm it is required that operational activities carried out by Lendahand (maintaining the website, contracting of local partners, legal issues, etc.) are strictly separated from financial transactions (payments made through the website). LemonWay takes care of the payments. This collaboration offers you more security, since your money is placed on a protected bank account immediately after you have made your payment.

What happens when LemonWay goes bankrupt?

The money of investors already on the (shielded) bank account of LemonWay will not be part of the bankruptcy. Bank BNP Paribas will then handle the case. Money outstanding with Local Partners and Companies (direct loans) will be handled by a to propose curator.

What happens when a local partner goes bankrupt?

When a local partner goes bankrupt, there will be a chance that you lose (part of) the amount you lend. Obviously Lendahand will try to recover outstanding payments, but the success rate will be limited in such situations. For the investor there is no possibility to take action against the financial institution. From a legal point of view the local partners are separated, therefore it is recommendable to spread loans across different local partners.

About Sollatek

Total assets€3,335,201
Revenue€2,163,082
Leverage ratio40.70%
Solvability271.00%
Liquidity144.00%

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