GOGLA, the global association for the off-grid solar industry, supported by GET.invest, has unveiled its 2024 Investment Database, revealing that total investment in off-grid solar companies reached nearly US$300 million over the past year — a 30 per cent contraction compared to 2023.
This downturn mirrors the broader African venture capital landscape, where early-stage companies and productive-use technologies have been hit hardest, raising concerns about the sector’s ability to innovate and scale at a critical juncture.
Despite the decline, scale-up companies demonstrated resilience by raising US$229 million, accounting for 77 per cent of total sector investment.
Mature firms such as Sun King and d.light leveraged securitisations and off-balance-sheet structures to raise capital while managing risk.
Notably, the sector saw early exits, internal debt repayments, and significant merger and acquisition activity, including Ignite’s acquisition of ENGIE Energy Access, signalling to investors that off-grid solar can deliver both impact and returns.
Conversely, start-up investment plummeted by 70 per cent in 2024, reflecting wider venture capital trends across Africa.
The sector has already experienced a wave of consolidation, resulting in a more streamlined landscape with a stronger cohort of capital-efficient, impact-driven companies.
Seed-stage companies, however, managed to raise US$21 million — matching last year’s total — with a record 67 companies securing funding.
Half of all seed investment targeted productive use of renewable energy (PURE) solutions, and 62 per cent went to nationally owned firms, demonstrating ongoing investor confidence in early-stage innovation.
Investment in PURE fell by 62 per cent due to the absence of large equity deals, though smaller, grant-led activity persisted.
Over US$900 million in Results-Based Financing (RBF) has been committed to the sector, with major programs in Nigeria and Uganda now moving from commitment to implementation, helping to close the US$9 billion affordability gap for universal energy access.
“This is a moment of both maturity and momentum for the off-grid solar sector — but it hasn’t come without cost,” said Laura Fortes, Senior Access to Finance Manager at GOGLA.
“We’ve seen tough exits and market consolidation, shaped by a long-running equity crunch. Yet the companies that remain have shown remarkable resilience, operating in challenging environments while continuing to deliver life-changing products to underserved communities.
“Demand is strong, the public value is undeniable, and the opportunity is real. But to unlock it at scale, we need donors to urgently address the affordability gap — so that companies can do what they’re built to do: deliver.”
As new equity funds launch and the M300 initiative aims to unlock capital and subsidies for 300 million people, the sector is poised for a breakthrough.
Blended finance remains crucial, with small grants able to catalyse up to 10 times in private investment, driving climate resilience, economic inclusion, and financial access.
