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SA startup The Sun Exchange, a blockchain-based solar micro-leasing marketplace, will launch an initial coin offering (ICO) next week to allow investors to earn an income off small solar projects. It aims to raise $25-million in the ICO.
The ICO will also help seed, what the startup calls “the world’s first crowd-sourced default insurance fund for clean energy projects in emerging markets”.
The Sun Exchange Solar Project Insurance Fund (SPIF) will be established shortly after the close of the token sale. The SPIF will help safeguard Sun Exchange solar cell owners against costs associated with potential solar project defaults.
The ICO aims to help users who buy SUNEX tokens (built on the Ethereum blockchain) to earn income by helping to purchase solar photovoltaic (PV) cells for about $10 per cell.
The cells will then be installed in solar projects for businesses, hospitals, schools and other organisations in Southern Africa, the Middle East and other sunny developing regions, says The Sun Exchange.
The Sun Exchange’s $25m ICO aims to allow investors to earn an income off small solar projects
The announcement today comes after the startup secured funding said in October last year that it had raised $1.6-million to fund a planned ICO.
Sun Exchange founder and CEO Abraham Cambridge said with aid organisations and NGOs primarily funding residential solar, and large banks and financiers only backing large and utility-scale projects, smaller solar projects often fall into a major funding gap.
“Small commercial and industrial solar projects can drive urgent economic development by powering organisations such as hospitals, schools, small and medium businesses in developing regions,” he said.
In its Whitepaper The Sun Exchange says it will use the first $5.4 million in token sale proceeds for business development, taxes and token sale expenses. Thereafter, token sale proceeds will finance the SPIF with up to 20 percent of token sale proceeds.
Remaining funds will cover pre-financing of construction of solar projects to be subsequently sold on the Sun Exchange platform and additional business development costs such as marketing via social media.
Among other things, those that purchase SUNEX tokens stand the chance to receive up to a 20 percent return in tokens by staking SUNEX tokens into the Sun Exchange SPIF and can take advantage of a gamified rewards programme, which guides users towards maximising the diversification and social impact of their solar cell portfolio.
To date, Sun Exchange has provided financing for four solar projects throughout South Africa (see the list here), which are now fully operational.
The crowdsale for its fifth project, which will provide power for environmental NGO South South North, recently sold out in two weeks, selling 4080 solar cells at just over R105 a cell and raising R428 400.