Africa’s off-grid solar market blocked by investment challenges – EIB


With factors such as inadequate funding hindering the wide-scale deployment of off-grid solar projects in Africa, a new report published by the European Investment Bank (EIB) highlights how these types of market challenges can be addressed.



The report, published by the EIB in partnership with International Solar Alliance, was compiled by Dalberg to identify how some of the pressing issues hindering off-grid solar deployment including; affordability, equipment supply, access to working capital, regulatory challenges, insurance, and technical expertise can be addressed.


Affordability and investment challenges have been identified as the main constraints blocking the deployment of off-grid solar projects. Hence scaling up funding can help improve access to affordable and clean electricity to some 120 million households currently living in energy poverty in Africa.


Up to 60 million households are expected to remain without electricity by 2030 unless urgent action is taken, according to the report.


Ambroise Fayolle, vice president of the EIB, said: “Closer cooperation between African, European and global partners can unlock investment and technical barriers that hold back sustainable development and the green transition.”


To unlock the funding required, the report encourages combining commercial financing and support from development finance partners. This would address working capital and exchange rate risks, and political and economic stability holding back private sector investment in off-grid solar.



The development and enactment of government policy supporting off-grid solar is another measure identified in the report that can help unlock the full potential of the market thereby improving electrification.


In addition, the report calls for the sharing of best-practices with development finance partners and project developers and for the private sector to lead the off-grid market.

The report compiles lessons learnt from off-grid solar projects deployed for refugee communities in Uganda and enabled cost-effective energy access in Nigerian cities.


EIB is currently supporting 8 off-grid solar projects across Sub-Saharan Africa.



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