Renewables funding dips in April

From the newsletter

African renewables received $1.4 billion in 10 funding deals, six times less than in March, according to the Continent Rising funding database. Both established companies and startups benefited, with the Nigerian energy startup Arnergy securing $18 million in Series B funding to expand its operations. Only Nigeria secured more than one funding deal.

• Despite the decline in funding received, over $27.2 billion was pledged. Italian energy company Eni announced plans to invest $27 billion across Algeria, Libya, and Egypt over the next four years.

• Loans and grants accounted for 55% of the total funding received. Mauritania received the highest amount, at $289 million in financing, to develop solar power generation and transmission and accelerate its energy transition.

More details

• Nigeria led the pack, receiving $518 million. Genesis Energy Holding, a UK-based pan-African clean energy company, signed a $500 million Memorandum of Understanding (MoU) with the Katsina State Government to develop a range of major energy infrastructure projects.

• Côte d'Ivoire received $170 million to deploy solar mini-grids targeting 400 settlements, making it one of the largest distributed solar investments in the country. Other West African countries, like Togo and Mali, received $65 million and $40 million, respectively, mainly for solar energy projects.

• Solar was the most preferred technology, receiving more than 80% of the total funding. Solar with battery storage is also starting to gain preference, with over $105 million in investments channelled towards it, mainly for solar projects in Mali and Togo.

• The East African region received $149 million, the second highest after West Africa, which received $1 billion. The Southern region received $127 million, and North Africa closed the ranking with only $75 million, but received the highest pledges for future funding.

• Private equity funding seems to be becoming attractive with the emergence of dedicated funds for renewable energy. Airnergize Capital Fund 1 secured $120 million to drive sustainable energy investments in the southern Africa region. It is targeting to raise $200 million in the coming months. In March, Evolution III Fund raised $238 million for renewables.

Our take

• Solar and battery storage technologies have passed the technology confidence test and continue to attract investment. Hybrid solar projects are now moving from pilot to mass implementation, and investments are expected to rise rapidly.

• The growth of private equity funds indicates promising sector growth, assuring investors of returns. This should be scaled up to elevate renewables investments to another level.

• Other renewables, like hydropower and wind, conspicuously missed out on funding this month. Investors should diversify their investments into these sectors. Hydropower, in particular, despite the risks, is becoming an important player in the energy transition.