Acumen secures $90 million for African climate ventures

From the newsletter

Impact investor Acumen has secured $90 million in capital to support Africa’s climate entrepreneurs. The fund is structured in a blended finance model to derisk early-stage ventures. This comes as Africa pushes for more blended financing to solve its pressing need of lack of affordable capital, which has long denied millions of people access to power.

• Most of the capital in the sector is flowing to established players, while startups struggle to raise funds. Even when they succeed, the amounts are small. Our funding database shows they have received less than 5% of total funding since the start of the year.

• This is worrying, given that established players mainly target large industrial consumers and utility-scale projects, leaving rural communities dependent on a small number of startups offering off-grid solutions.

More details

• The KawiSafi Fund II builds on its first $67 million KawiSafi Fund I, which was established in 2016. It will channel catalytic equity into businesses in distributed renewable energy, resilient mobility, clean cooking, and access to carbon finance, with the ambition to reach 50 million people and avert millions of tons of carbon dioxide. Anchor investors include the African Development Bank’s Sustainable Energy Fund for Africa (SEFA), the Green Climate Fund, the Schmidt Family Foundation, and the Quadrature Climate Foundation.

• This milestone comes at a pivotal moment in Africa’s energy transition. Expanding access will require investment beyond traditional grids to reach communities historically excluded from energy systems. Fund II is responding by deploying capital to Africa-based entrepreneurs who are laying the foundation for a low-carbon future. It builds on nearly a decade of experience investing in companies that expand clean energy access and strengthen economic resilience.

• “Securing $90 million for a successor KawiSafi fund is a major milestone and a signal to the market: capital can and must flow toward a more inclusive, low-carbon future,” said Amar Inamdar, Managing Director of the KawiSafi funds. “We are backing the entrepreneurs who are building scalable business models that turn climate challenges into growth opportunities across Africa.”

• Since 2007, Acumen has invested at least $114 million in the clean energy space, supporting 49 off-grid companies, including solar home system providers like d.light and Winock Solar, as well as mini-grid developers such as Husk Power. With Fund II larger than its predecessor, Acumen will be able to back businesses at a greater scale and accelerate energy access in underserved rural areas where it is needed most.

• Funding flows into Africa’s energy sector continue to gain momentum. Our database shows the sector has attracted at least $90 billion in commitments and pledges. However, a large share of this capital has been in the form of loans directed toward major energy projects and large companies, leaving startups struggling to expand their markets. Though some well-established off-grid players, such as SunKing, have continued to benefit and have not been cut off from funding flows.

• Private equity players have also come in aggressively, with more than $1 billion in funding pools announced since the start of the year. This shows the sector’s profitability, and the recent exits by AIIM from three projects in South Africa further underscore investor confidence.

• However, much more is needed in venture capital to support emerging startups. While large-scale projects are attracting significant capital, early-stage companies—often the ones driving innovation in off-grid energy, clean cooking, and storage—still struggle to raise the funding required to scale. Bridging this gap will be critical to ensure the sector delivers inclusive growth and expands access beyond established players.

Our take

• Funds inclusion of energy adjacent sector, like mobility and clean cooking, could help stimulate demand for rural minigrids.

• The fund’s focus on Africa-based entrepreneurs could strengthen local ecosystems. Startups that previously struggled to attract risk capital may now see more opportunities to scale within Africa, rather than relying solely on foreign investors.

• Next should be a focus on local currency lending to shield startups from inflation and exchange-rate risks. This would lower repayment pressures and make capital more accessible for growth in underserved markets.