The Overseas Private Investment Corporation (OPIC), the US government’s development finance institution, has approved a $15m loan to a new investment vehicle managed by SunFunder that will provide financing to companies operating in developing countries that manufacture, distribute and install solar lighting and energy systems.

This project uses OPIC’s Innovative Financial Intermediaries Program (IFIP), which focuses on smaller investment funds that apply innovative approaches to address specific development challenges.

SunFunder will provide receivables financing, project financing, and inventory/working capital loans to the manufacturers, distributors, installers and retailers that provide solar energy in countries such as Tanzania, Kenya, Rwanda, Ethiopia, Zambia, Uganda, Ghana, as well as Philippines, Pakistan and India.

The types of solar products will range from portable solar powered lamps to 200W solar home systems to 500kW diesel replacement systems.

Through its $50m “Beyond The Grid Solar Fund”, SunFunder estimates that several million individuals will benefit by switching from kerosene and diesel to solar energy, thereby enabling low-income households and businesses to lessen their expenditures on energy while significantly reducing CO2 emissions.

Elizabeth Littlefield, OPIC’s President and CEO, said: “OPIC is proud to partner with SunFunder in delivering innovative financing solutions for off-grid and grid-deficit solar energy in developing countries. The fund will facilitate access to financing by companies that provide clean energy products and services.”

In December 2013, SunFunder received $150,000 in African Clean Energy Facility (ACEF) funding to expand its client base in Africa and help prepare for its OPIC loan application.

The “Beyond The Grid Solar Fund” was selected for a loan through OPIC’s IFIP, a $500m pilot program to support smaller-scale financial intermediaries investing in OPIC-eligible countries with a specific focus on impact and innovation.

The OPIC loan will assist SunFunder, a Power Africa partner, to deliver on its commitment to support Power Africa's Beyond the Grid sub-Initiative.

Since the start of Power Africa in June 2013, OPIC has committed more than $1.6bn in financing and insurance to power projects in Sub-Saharan Africa.

“Solar energy is the most viable solution to replace dirty and unreliable fossil fuel energy sources and to increase energy access for those who really need it,” said Ryan Levinson, SunFunder’s Founder and CEO.

“To support solar’s growth in emerging markets, access to sector-specific financing is key. OPIC’s investment in SunFunder's Beyond The Grid Solar Fund will help expand our ability to respond to the financing gap that exists for off-grid and grid-deficit solar. Getting this kind of support and validation from OPIC will open up more opportunities not only for solar enterprises but also for investors worldwide,” he said.