By: Bugirimfura rachid
Investment in the off-grid solar sector hit a record US$450 million in 2021, according to the latest report from the Off-Grid Solar Market Trends Report 2022: State of The Sector published by the World Bank’s Lighting Global, the International Finance Corporation (IFC), GOGLA, Efficiency for Access Coalition, and Open Capital Advisors.
In what constitutes a return to growth for the industry post-pandemic, investment soared by more than 40% after years of topping out around the US$300 million mark.
Between 2012 and 2021, the off-grid solar sector has raised $2.3 billion in capital through debt, equity, and grants. From 2016 to 2020, the industry saw yearly investment volumes plateauing between $300 million and $350 million, before reaching $457 million in 2021.
This year (2022) is set to be another record-breaking year. The largest share of funding has been assigned to East Africa (49%), as larger, scale-up companies are attracting debt in their most established markets.
“IFC has long been a believer in the potential of the off-grid solar market to provide reliable, sustainable energy access for millions by building partnerships between companies, investors, governments and donors. Despite the challenges of COVID, the sector continues to mature and the market opportunities are increasing for investors to help off-grid solar companies scale and meet the challenges of SDG7,” says Peter Cashion, Global Head Climate Finance, Financial Institutions Group.
According to Norah Kipwola, the Senior Energy Specialist at World Bank Rwanda, one of the factors that has led to Rwanda’s off-grid solar industry steady growth is the strong partnership and support provided by the World Bank to the government and private sector through its Lighting Global Program, Renewable Energy Fund among others programs on quality assurance and capacity building.
“In 2020, the World Bank granted Rwanda $150 million in financing to improve access to modern energy for households, enterprises, and public institutions and $ 27.5 million for Renewable Energy Fund (REF) Project for six years (2017 – 2023,” she said.
