The Netherlands Development Finance Company, a public-private bank also known by its Dutch acronym FMO, recently arranged USD 15.5 million in local-currency financing for Solesco Centroamérica, a Guatemalan solar company that primarily serves rural areas under the brand name Kingo. The funding comes in the form of a seven-year, local-currency loan with funding equivalent to USD 5.5 million from the FMO-managed Infrastructure Development Fund, the equivalent of USD 5 million from FMO and the equivalent of USD 5 million from Dutch cooperative Oikocredit. Kingo plans to use the funds for the purchase and installation of solar panels as well as general organizational growth expected to help Kingo reach 250,000 new customers.
Kingo CEO and Co-founder Juan Fermín Rodriguez said, “Kingo’s aim goes beyond eliminating energy poverty, and involves playing a spearheading role in the development of the rising billion. This financing will help Kingo advance towards its goals and the company will be closer to positively impacting 1 million households by 2020.”
Founded in Guatemala in 2013, Kingo focuses on decentralizing access to energy by bringing solar power to regions that are not served by existing infrastructure. Kingo’s business model allows customers to rent access to solar energy as needed, using codes purchased from local stores that give access to energy on a daily, weekly or monthly basis. As of August 2018, Kingo serves 300,000 customers and plans to grow that to 550,000 through the new funding.
FMO, which was established in the Netherlands in 1970, is 51-percent owned by the Dutch government. The bank’s vision is to help abolish extreme poverty, increase equality and support measures that reduce climate change. For 2017, FMO reports pre-tax earnings of EUR 292 million (USD 350 million) from operations in approximately 70 countries. As of the end of that year, the organization had total assets of EUR 8.3 billion (USD 10 billion) including EUR 3.3 billion (USD 4 billion) in investments outstanding to financial institutions.
The Infrastructure Development Fund was established in 2002 by the Dutch government and FMO to support the development of infrastructure that helps improve quality of life primarily in developing countries. The fund also has an environmental focus, helping the Dutch government reach its climate-related goals. Disbursements from the fund range up to EUR 10 million (USD 11.6 million) and may be denominated in euros, US dollars or local currencies.
Founded in 1975, Oikocredit is a cooperative that invests in microfinance, fair trade, agriculture and renewable energy. As of September 2017, it has EUR 935 million (USD 1.15 billion) in capital invested in 780 partners in 70 countries.
By Erik McDonald, Research Associate
Sources and Additional Resources
FMO Press Release
https://www.fmo.nl/news-detail/a35300e6-2140-4f03-893f-7dfac9299376/fmo-leads-usd-15-5-million-finance-for-kingo-s-off-grid-solar-services-in-guatemala
Kingo
https://www.kingoenergy.com/
Oikocredit
https://www.oikocredit.coop/
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