NAIROBI, Kenya- Move over, fintech—there’s a new star in Africa’s investment landscape.
Climate tech startups have emerged as the continent’s hottest sector, attracting $413.9 million in funding by September 2024.
That’s a third of all startup investments in Africa this year, signaling a decisive shift as investors bet on businesses addressing climate change while solving everyday challenges.
The numbers don’t lie. Funding for African climate tech skyrocketed from $340 million in 2019 to a staggering $1.1 billion in 2023.
Recent high-profile deals paint a picture of a sector on the rise. Kenya’s D.Light raised $176 million to expand solar energy access, while Benin-based Spiro secured $50 million to scale its e-mobility solutions.
Kenya’s electric bus maker BasiGo brought in $42 million, and Ghana’s solar energy leader PEG Africa was acquired by UK-based Bboxx for $200 million, creating a clean energy giant serving 3.5 million customers across 10 countries.
And it’s not just startups. The International Finance Corporation (IFC) recently invested $5 million in the Equator Africa Fund I, which has $54 million to support innovative climate tech solutions like SunCulture’s solar-powered irrigation and Roam’s electric motorcycles.
Other backers include FinDev Canada, which put $13 million into the Energy Entrepreneurs Growth Fund, and Persistent Energy, raising $10 million to nurture green startups across the continent.
The impact of these investments is already tangible. In Rwanda, Ampersand is working with Chinese company BYD to produce 40,000 electric motorcycles by 2026, offering cheaper, greener transport.
South Africa’s Wetility is helping households adopt solar power with its $48 million funding. In East Africa, Kubik is turning hard-to-recycle plastics into affordable building materials, while Nigeria’s MAX has raised nearly $100 million to develop electric two- and three-wheelers and charging networks.
This boom isn’t just about cleaner energy—it’s about better livelihoods. Farmers are using solar-powered irrigation to grow crops despite erratic rainfall.
Families who lacked electricity are now running appliances, and motorcycle taxi drivers are saving on fuel with electric bikes.
Despite the progress, Africa still faces a massive climate finance gap. Meeting its climate goals by 2030 requires $277 billion annually, but only $30 billion is being raised each year.
Private funding remains low compared to other regions—just 14pc in Africa, compared to 49pc in Latin America and 39pc in East Asia.
However, this gap presents opportunities for investors willing to diversify beyond solar and wind power. In 2024, areas like logistics and transport (29pc of funding) and agriculture (10pc) gained traction, highlighting the sector’s expanding scope.
For investors, Africa’s climate tech boom offers a chance to profit while solving critical challenges. Companies like Bboxx prove that scaling impactful solutions is not just possible but highly lucrative.
