NIDF Refinances Starsight Energy’s N8bn Debt

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Chapel Hill Denham Nigeria Infrastructure Debt Fund (NDIF) has entered into a long term agreement to refinance Starsight Energy’s debt over 10 years to the tune of N8billion ($20 million).

Backed by private equity firms, Helios Investment Partners and Africa Infrastructure Investment Managers, the commercial & industrial (C&I) energy-as-a-service provider, has deployed approximately 48 MW of generation assets and 35mwh of storage at over 500 sites in all Nigerian states and Ghana.

The Lagos-based company has taken out loans from the Norwegian government Investment Fund for Developing Countries (Norfund) and the Finnish Fund for Industrial Cooperation (Finnfund).

The solar photovoltaic energy provider has secured two lines worth a combined $20million in 2019 and 2021. Since 2015, the company, which provides solar power to commercial and industrial customers, has installed its small-scale plants at more than 500 sites, with 36 MW of generation capacity and 28mwh of electricity storage capacity.

That NIDF refinanced Starsight’s debt in the local currency, which is naira denominated, is an important transaction that allows the company to better utilize financing for business development, company officials said.

“The increasing difficulty of sourcing U.S. dollars in Nigeria, as well as the devaluation of the Nigerian naira on the parallel market over the past five years, has made U.S. dollar debt increasingly expensive,” says Starsight’s chief financial officer, Paul van Zijl.

According to the solar energy provider, the refinancing of its debt will therefore remove the currency mismatch and exchange rate volatility associated with its Nigerian business.

This transaction also allows for a reduction in the cost of its debt in terms of local currency and an increase in the duration of its debt “with favorable clauses.”

This refinancing comes more than a year after a first transaction with NIDF. In January 2021, Starsight signed an agreement for a N3.6 billion (over $9 million) credit facility with NIDF. The 10-year credit facility is intended, according to the solar power provider, to significantly expand its existing portfolio, which includes banks, gas stations, schools, hospitals, agricultural companies and other large C&I customers in Nigeria.

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