SunCulture, a Kenyan company that sells solar-powered water pumps to smallholder farmers, has closed a $10 million receivables securitisation tied to its solar irrigation systems. To understand the deal, it helps to first understand what securitisation actually is. In simple terms, securitisation is when a company takes a bundle of future payments that are owed to it and turns them into a financial product that investors can buy. Instead of waiting years to collect all the money from its customers, the company sells those future payments to a specially created entity, which then raises money from investors against them. The company gets cash upfront, and the investors get the right to receive the customer payments over time.
Subculture’s “Pay-As-You-Grow” Model
SunCulture had thousands of smallholder farmers who were paying for their solar irrigation systems in instalments through a model the company calls “Pay-As-You-Grow.” These farmers were making regular monthly payments, but those payments stretched out over a long period. That meant SunCulture had a lot of money tied up in receivables, which is the accounting term for money that customers owe but have not yet paid. The more farmers SunCulture served, the more capital got locked into these long-dated receivables, and the harder it became to fund new customers.
The solution was to create a dedicated special purpose vehicle, essentially a separate legal entity, that would acquire these receivables from SunCulture Kenya. Mirova’s Gigaton Fund then provided $10 million in senior secured financing to that special purpose vehicle. In plain language, Mirova lent money to the special purpose vehicle, and the special purpose vehicle used that money to buy SunCulture’s farmer receivables. SunCulture got cash immediately, which it could then use to buy more solar pumps and reach more farmers. The farmers kept paying their instalments as before, but now those payments flowed to the special purpose vehicle to repay Mirova.
This might sound complicated, but the principle is straightforward. SunCulture stopped being a company that held long-term debts on its balance sheet and became a company that could originate loans, package them and recycle its capital. Every time it needed more money to grow, it did not have to go out and raise new equity or take on more debt in the traditional way. It could simply sell more receivables through the securitisation structure.
Who Is SunCulture and Why Do They Matter?
SunCulture was founded in Kenya in 2012 by Samir Ibrahim and Charles Nichols. The company began with a simple observation: farmers in Kenya and across Africa were relying on rainfall to water their crops, and that rainfall was becoming increasingly unpredictable. When Ibrahim asked farmers what problem they most needed solved, the answer was always the same. They needed reliable access to water to irrigate their farms year-round. Diesel and petrol pumps existed, but they were expensive to buy and expensive to run. They also contributed to carbon emissions and were noisy, heavy and unreliable.
SunCulture’s solution was to replace those diesel and manual pumps with solar-powered irrigation systems. The company designed and sold solar water pumps that were cheaper to operate, cleaner for the environment and easier for farmers to use. But there was a problem. Most smallholder farmers could not afford to pay the full cost of a solar pump upfront. The equipment might cost several hundred dollars, which is far beyond the reach of a farmer earning a few dollars a day.
That is where the Pay-As-You-Grow model came in. SunCulture allowed farmers to pay for their solar irrigation systems in instalments, much like a hire-purchase arrangement. Farmers would make affordable monthly payments, and once they completed the payments, they owned the equipment outright. The company bundled insurance and warranty services into the package, so farmers did not have to worry about breakdowns or unexpected repair costs. This model made solar irrigation accessible to people who would never have been able to afford it otherwise.
Since its founding, SunCulture has sold over 85,000 solar irrigation systems and pumps. The company says its solutions help farmers reduce their dependence on unpredictable rainfall, improve agricultural productivity, strengthen climate resilience and increase household incomes. Research conducted by Duke University and the University of Nairobi has found that access to SunCulture’s solar irrigation systems is associated with meaningful improvements for smallholder farmers.
SunCulture has also been at the forefront of using carbon markets to make its products more affordable. The company developed the first carbon project for solar irrigation in Africa and has sold Verified Carbon Units to buyers like EDF Trading. The carbon revenue helps SunCulture discount the upfront price of its solar pumps, making them even more accessible to low-income farmers. In addition to irrigation, SunCulture offers micro-health insurance, credit-life insurance and parametric weather insurance to its customers, turning itself into a broader platform for rural financial services.
Why Securitisation Is a Big Deal for African Climate Tech
For most of the past decade, African climate technology companies have relied on a narrow set of funding sources. They have raised equity from venture capital firms and impact investors. They have received grants and concessional loans from development finance institutions and philanthropic foundations. They have used results-based financing and carbon credits. All of these sources have been important, but they have also been limited. Venture capital is expensive and comes with high expectations for rapid growth. Grants are limited in size and usually not repeatable. Development finance is often slow and bureaucratic. Carbon markets are volatile and still evolving.
Securitisation represents a different category of financing altogether. It is institutional debt, priced on commercial terms, secured against actual repayment behaviour rather than development impact projections. When Mirova’s Gigaton Fund invested in SunCulture’s receivables, it was not making a charitable donation or a high-risk venture bet. It was buying into a pool of loans made to farmers, and it expected to be repaid from the farmers’ monthly instalments. The fact that Mirova was willing to do this means that SunCulture’s receivables portfolio was strong enough to pass the scrutiny of a serious institutional investor.
This matters because it opens up a source of capital that is far larger than the grant and venture funding that African climate tech has traditionally relied on. Global capital markets manage trillions of dollars. If even a small fraction of that money can be directed toward African climate assets, it could transform the pace at which clean energy and climate-smart agriculture spread across the continent. Securitisation is the mechanism that makes this possible.
The deal also addresses a fundamental problem that has held back many African companies: the mismatch between the currency their customers pay in and the currency their investors expect to be repaid in. SunCulture’s farmers pay in Kenyan shillings. But growth capital in Africa has historically been denominated in dollars or euros. This creates what is known as foreign exchange risk. If the Kenyan shilling weakens against the dollar, the company’s debt becomes more expensive to service, even if its underlying business is performing well. Many African businesses have been damaged by this mismatch. The SunCulture securitisation includes FX protection built into the structure, meaning that the currency risk is managed in a way that protects the company from sudden exchange rate movements. This is a crucial innovation, because it makes the deal more sustainable and replicable for other African companies facing the same challenge.
Africa’s Climate Tech Ecosystem Is Maturing
SunCulture’s deal did not happen in isolation. It is part of a broader shift in how African climate technology is being financed. In 2024, funding for African climate tech startups fell to $754 million. But by November 2025, it had rebounded to $1.1 billion, with climate and energy startups increasingly rivalling fintech for investor attention. More importantly, the way this capital is being treated has changed. Climate tech is no longer seen as a niche impact investment. It is increasingly being financed as infrastructure, with patient, blended capital designed for long-term scale.
Other African companies have also turned to securitisation and capital markets. Sun King, the world’s largest off-grid solar company, closed a landmark $156 million securitisation in Kenya in 2025, described as the largest and first majority commercial-bank-backed deal of its kind in Sub-Saharan Africa outside South Africa. Sun King had previously completed a $130 million securitisation in 2023. These deals, along with SunCulture’s $10 million transaction, are testing whether institutional investors will back pay-as-you-go business models on a commercial scale.
The principle is the same across these deals. Companies that sell solar products to customers on credit accumulate receivables. Those receivables can be packaged and sold to investors. The companies get cash to grow, and the investors get a return from the customers’ repayments. This is exactly how the mortgage and auto-loan markets work in developed countries. Instead of mortgages, the underlying assets are future customer payments for solar systems.
The emergence of securitisation in African climate tech is significant because it signals that the sector is maturing. Companies are building the track records, the data and the governance structures that institutional investors require. They are also demonstrating that low-income customers in Africa can be reliable borrowers. This is a powerful counter-narrative to the widespread assumption that lending to smallholder farmers is too risky. SunCulture’s decade of experience in pay-as-you-go lending gave Mirova something concrete to underwrite against: actual repayment data from thousands of farmers.
The Significance of this Deal for Farmers and for Africa
For smallholder farmers in Kenya and across Africa, the immediate impact of this deal is straightforward. SunCulture now has more capital to expand its operations. It can buy more solar pumps, reach more customers and provide more farmers with access to reliable irrigation. As Samir Ibrahim put it, faster recycling of capital means more farmers irrigating sooner. For a farmer who has been struggling with unpredictable rainfall and failing crops, access to a solar-powered irrigation system can be transformative. It means the ability to grow crops year-round, to increase yields, to earn more income and to build a more secure future.
For the broader African economy, the implications are equally important. Agriculture is the backbone of most African countries, employing a large share of the population and contributing significantly to GDP. But agricultural productivity in Africa remains low compared to other regions, largely because of dependence on rain-fed farming. Solar irrigation has the potential to change this. By making irrigation affordable and reliable, solar pumps can help African farmers produce more food, reduce post-harvest losses and increase their incomes. This, in turn, can drive rural development, create jobs and improve food security.
The securitisation model also has the potential to attract a new class of investors to African climate assets. Institutional investors such as pension funds, insurance companies and asset managers have traditionally been hesitant to invest in African climate tech because of perceived risks and a lack of suitable investment products. Securitisation creates products that these investors can understand and evaluate. They are buying into pools of receivables, not individual startup companies. The risk is diversified across thousands of farmers. The cash flows are predictable and backed by real repayments. As more African climate tech companies build securitisation track records, the market for these products should deepen, bringing more capital into the sector.
A Host of Challenges Including Regulatory and Legal
It would be wrong to suggest that securitisation is a magic solution that will suddenly solve all of African climate tech’s financing problems. The structure requires a company to have a large enough portfolio of receivables to make securitisation worthwhile. Mirova’s Rim Azirar has described the transaction as a blueprint, but replication depends on a company having a receivables portfolio that is both large enough and clean enough to securitise. Most productive-use solar companies in Africa are not yet at that stage. This means that securitisation is immediately available only to a small group of mature operators. For everyone else, it serves as a target architecture to build toward.
There are also regulatory and legal challenges. Securitisation requires a robust legal framework that allows for the creation of special purpose vehicles, the true sale of receivables and the enforcement of investor rights. Not all African countries have these frameworks in place. South Africa has a relatively developed securitisation market, but other countries are still catching up. The good news is that deals like SunCulture’s can serve as precedents that encourage regulators and policymakers to create more enabling environments.
Data and monitoring are also critical. Investors in securitisation deals need to be able to track the performance of the underlying receivables. They need to know how many farmers are paying on time, how many are defaulting and how the portfolio is performing overall. Kaleidofin, a fintech platform, acted as portfolio monitoring agent for the SunCulture deal, using its analytics platform and credit decisioning model to select receivables and model cash flows. This kind of infrastructure is essential for building investor confidence and scaling securitisation across the continent.
Finally, there is the question of currency risk. SunCulture’s deal included FX protection, which is a significant innovation. But not all securitisation deals will be able to replicate this. If African companies continue to borrow in foreign currency while earning revenue in local currency, they will remain vulnerable to exchange rate shocks. The long-term solution is to develop deeper local currency capital markets, so that companies can borrow in the same currency they earn in. This is a much bigger challenge, requiring reforms in monetary policy, banking regulation and capital market development. But it is a challenge that African policymakers and financial institutions must eventually address if the continent is to finance its climate transition at the scale required.
