When Sun King announced plans to connect 1.5 million households in Madagascar, one question immediately stood out: How can a company afford to install thousands of solar systems when customers pay as little as 15 cents a day?
The answer lies in a financing model that looks more like consumer lending than traditional solar sales. Instead of waiting years to recover its money, Sun King turns millions of small customer payments into financial assets that banks and investors are willing to fund.
Step 1: Customers don’t buy the system outright
A typical solar home system can cost far more than many rural households can afford to pay upfront. Instead of asking customers to pay hundreds of dollars immediately, Sun King lets them make a small deposit followed by daily, weekly or monthly instalments. Some customers pay as little as $0.15 to $0.21 per day using mobile money or local payment agents. The system is installed immediately, allowing families to begin using electricity on day one.
Step 2: The solar system doubles as collateral
Every Sun King solar unit contains embedded technology that communicates with the company’s payment platform. If a customer stops making payments, the system can be temporarily deactivated remotely. Once payments resume, electricity is restored. After the final instalment is made, typically within 12 to 24 months, the system is permanently unlocked and belongs to the customer. This dramatically reduces credit risk compared with traditional unsecured consumer loans.
Step 3: Millions of small payments become a valuable asset
One customer paying a few cents each day isn’t particularly valuable. But millions of customers paying reliably every month create predictable future cash flows. Those future payments become financial assets that can be used to raise capital. Instead of waiting years to recover its investment, Sun King borrows against those expected repayments.
Step 4: Banks provide the upfront capital
To finance new installations, Sun King raises large debt facilities from banks and development finance institutions. For example, the company secured an $80 million local-currency facility backed by IFC and Stanbic IBTC Bank to expand its Nigerian operations. Using local-currency financing also protects both the company and customers from foreign exchange volatility.
Step 5: Investors help fund future growth
Debt isn’t the only source of capital. Sun King also raises equity from impact investors that want both financial returns and measurable social impact. In 2025, the company secured $40 million from Lightrock to support expansion across Africa. That funding helps build distribution networks, hire staff, develop products and finance even more customer loans.
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Step 6: Recycling capital through securitisation
Perhaps the most sophisticated part of the model is securitisation. Rather than keeping customer loans on its own balance sheet, Sun King bundles thousands of repayment contracts together and sells them to institutional investors. Investors receive income as customers continue making payments. Sun King receives fresh capital immediately, which it can use to finance the next wave of solar installations. The company has already completed large securitisations, including a $156 million transaction in Kenya.
Why the model works
Sun King’s business is about combining technology, consumer finance and capital markets into a single business model. Customers gain affordable electricity without paying large upfront costs. Banks earn returns from financing predictable repayment portfolios. Impact investors fund measurable development outcomes.
And Sun King recycles the capital repeatedly to connect millions of new households. That financial engine is what makes it possible for the company to promise 1.5 million new electricity connections in Madagascar while charging customers just a few cents a day.
