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Solar panels dot rooftops across sprawling Lagos, a Nigerian city that is undergoing a transformation as it adopts solar power. Nearly a decade ago, things looked quite different.
Climate technology was new in Africa, and it was tough to get funding for start-ups that would eventually enable the region’s electrification.
But the ecosystem has since changed, and in recent years, venture capital and private equity firms are increasingly funding climate-tech startups, with businesses raising more than $3.4 billion since 2019.
Rensource Energy, a company that provides solar and battery-based power subscription packages to individuals and businesses, is benefitting from the recent uptick in private funding.
“Automatically if you are using fossil fuel generation, which is the mainstay in this side, especially Sub-Saharan Africa, focusing more on West and Central Africa right, you have a lot of carbon emission and these things are not good for their atmosphere and what businesses like us try to do is to address such issue by using clean and sustainable energy at a scale that is equal to what the grid does, or equal to what larger fossil fuel diesel generators do,” says CEO Prince Ojeabulu.
Ojeabulu says financial backers were initially hard to find, they needed to be convinced they were investing in a good business model.
But there’s still a long way to go, with the continent requiring $277 billion annually to meet its climate goals for 2030 according to the funding database Africa: The Big Deal.
Experts say to unlock financing and fill this gap, African countries need to address risks like currency instability which deters investors.
At the same time, investors are being urged to expand their scope of interest to other climate-related industry sectors like flood protection, disaster management and heat management, and to use diverse funding methods.
This article was provided by The Associated Press.