Productive Use of Renewable Energy (PURE) technologies, especially those in the solar irrigation and cold chain segment, saw increased investor interest last year, despite a 43% funding slump recorded in the global off-grid solar sector.
The global association for the off-grid solar energy industry, GOGLA, says PURE technologies raised $65 million in 2023, double the previous year, owing to growing investor interest in the segment. Among the startups that raised funding in the sector last year is Figorr, which offers storage and transportation of temperature-sensitive products.
PURE technologies include appliances and products like solar-powered water pumps, refrigerators, cold rooms and agri-processing equipment that allow improved or new revenue-generating activities, mostly in the agriculture sector.
Laura Fortes, GOGLA senior Access to Investment manager, told TechCrunch the technologies are attracting interest due to their transformative impact on livelihoods through innovation.
“These solutions mitigate climate change, enhance resilience and offer increased income opportunities for beneficiaries, including smallholder farmers and health clinics. By replacing outdated diesel water pumps and fossil-fuel-dependent coolers, especially in the face of climate change, they bolster resilience and small farmer incomes,” said Fortes.
Overall, the off-grid solar sector raised $425 million last year across 158 deals, with $281 million being debt. Sun King, d.light, Engie Energy Access, M-KOPA, Zola and Bboxx accounted for 58% of the total investments. This shows that most of the funding went to startups or scale-ups with a presence in Africa, where these ventures provide products and solutions to address lack of energy access.
Globally, 75% of the population has no access to electricity, 46% of those being from Africa. Yet, equity investment in household solar startups remained low in what GOGLA says signals a concerning failure to nurture new companies focused on electricity access that will be crucial for achieving electrification goals.
“2023 investment data shows that without more de-risking instruments and concessional financing, off-grid solar will not reach the scale needed to achieve global development goals. While many examples of successful blended finance structures that are catalytic already exist, we need more of them to multiply industry funding by seven,” said Fortes.