- NIDF has agreed to refinance Starsight’s $20 million debt.
- Starsight has installed solar systems in 500 sites totalling 36MW.
Starsight Energy has reached an agreement with Chapel Hill Denham Nigeria Infrastructure Debt Fund (NIDF) to refinance its $20 million debt. In addition, the Lagos-based company had secured debt financing from the Norwegian Government Investment Fund for Developing Countries (Norfund) and the Finnish Fund for Industrial Cooperation (Finnfund). Starsight Energy provides solar energy to commercial and industrial (C&I) customers. The company has installed solar systems at about 500 sites totalling about 36MW of generation and 28MWh of storage capacity.
NIDF will refinance the debt in Naira, which allows Starsight to use the financing for its business development better. NIDF refinanced Starsight’s debt in the local currency, the naira. This is a significant transaction that allows the company to utilise financing for business development better. Starsight’s CFO Paul van Zijl notes that “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.” Starsight believes that debt refinancing will eliminate the currency mismatch and exchange rate volatility associated with its Nigerian business. It will also reduce the debt cost in Naira and increase the tenor with favourable clauses”.
Last January, Starsight and NIDF signed an agreement for a N3.6 billion (over $9 million) credit facility. According to Starsight, the 10-year credit facility will help to significantly expand its existing portfolio of large C&I customers in Nigeria.