From Solar Lanterns to the London Stock Exchange: 17 Years of Building the Energy Access Sector

Earlier this summer, Calvert Impact CEO Jenn Pryce and I joined fellow investors on the floor of the London Stock Exchange to mark the closing of Africa Frontier Capital's (AFC) green bond issuance. The bond, which will support solar home systems across Sub-Saharan Africa, represents a milestone moment for both AFC and the energy access sector overall. It is the first time the off-grid solar industry has accessed the public bond markets through a pay-as-you-go solar loan receivables securitization structure.

Calvert Impact Capital has been investing in off-grid renewable energy for nearly two decades, and it's exciting to watch the sector mature and gain access to financial tools that were not available even just a few years ago. Seeing AFCs logo on display in the London Stock Exchange, I realized that this deal is a perfect encapsulation of our portfolio strategy in action: we meet organizations where they are, provide the debt financing they need, and grow alongside them as they tackle poverty and climate change in communities across the US and around the world.

A New Era Begins with a Solar Lantern

Seventeen years ago, we made our first loan in the energy access sector. It went to d.light, then a young social enterprise with a solar lantern and a vision: a safer, cleaner, more affordable alternative to the kerosene that millions of off-grid families in Africa relied on for light.

Over the next decade, d.Light and other energy access companies like M-KOPA, Zola (formerly Off-Grid Electric), and BBOX expanded their businesses, offering solar-powered solutions for off-grid African households from simple lanterns into full home energy systems.

As their businesses evolved, our financing approach evolved with them. We turned our focus to specialized fund managers that were stepping up to serve companies like d.light. Fund managers like SunFunder (now Mirova), Cygnum (formerly Lions Head), responsAbility, and Lendable blended our capital with philanthropic and development finance funding to offer products tailored to the debt needs of the sector's fast-growing companies. And our capital continues to generate impact through those funds today.

Opening the Door to Mainstream Capital

We are committed to growing with partners and that's why we were so excited to further advance the sector as an anchor investor in AFC's green bond. In many ways, this transaction represents a coming-of-age for the energy access sector overall. A guarantee from the Green Guaranty Company enabled Legal & General Investment Management, a major institutional investor, to make its first-ever investment in energy access in Africa - and the bond is now listed on the London Stock Exchange. This opens the door to the kind of large-scale, mainstream capital the sector needs to keep growing.

The bond also strengthens the critical infrastructure that AFC provides that makes this deal - and future ones - possible. AFC's asset securitization platform buys the customer payment streams from solar operators, giving those companies the cash they need to keep expanding while building a public track record of how reliably off-grid households pay for their solar systems. That kind of performance data is what institutional investors need to see before they commit.

The real-world impact of the bond is significant. According to AFC, its proceeds will help d.Light reach an estimated 4.3 million households across Sub-Saharan Africa with affordable renewable energy over the next four years. This is particularly meaningful in a region where only about 53% of the population has access to electricity, according to World Bank's most recent analysis. And the majority of that power is not generated from renewable sources; only 7%​ of the continent's energy mix is generated from wind or solar. Attracting private capital to invest in distributed solar increases access to reliable, renewable energy in communities where it's needed most.

This Is Our Strategy in Action

The arc from that first d.Light loan to the AFC green bond reflects our deep commitment to impact that is both immediate and long-term, showing how we work alongside borrowers to drive systemic change over time.

When solutions like d.Light's needed early loans, we saw the potential and tailored financing to provide electricity access to people in need. We adapted our financing to support an ecosystem of financing providers to fuel the sector's growth and, with AFC's recent bond issuance, to pave inroads for institutional investors into the market. As the energy access market in Africa developed, our lending evolved to support and fuel that growth, demonstrating the viability of a sector that capital markets would have sidelined on its own.

This is the heart of our work: driving impact through individual deals while helping to shape entire markets, changing where and how capital flows to create a more sustainable future.