Productive Use of Renewable Energy (PURE) technologies, especially in the solar irrigation and cold chain segment, experienced increased investor interest last year, despite a 43% funding decrease in the global off-grid solar sector.
The global association for the off-grid solar energy industry, GOGLA, reports that PURE technologies raised $65 million in 2023, double the previous year, due to growing investor interest in the sector. One of the startups that secured funding in the sector last year is Figorr, which specializes in the storage and transportation of temperature-sensitive products.
PURE technologies encompass appliances and products such as solar-powered water pumps, refrigerators, cold rooms, and agri-processing equipment that enable improved or new revenue-generating activities, primarily in the agriculture sector.
Laura Fortes, GOGLA’s senior Access to Investment manager, informed TechCrunch that these technologies are drawing attention due to their transformative impact on livelihoods through innovation.
“These solutions alleviate climate change, enhance resilience, and provide increased income opportunities for beneficiaries, including smallholder farmers and health clinics. By replacing outdated diesel water pumps and fossil-fuel-dependent coolers, particularly in the context of climate change, they enhance resilience and small farmer incomes,” stated Fortes.
Overall, the off-grid solar sector raised $425 million last year through 158 deals, with $281 million in debt financing. Sun King, d.light, Engie Energy Access, M-KOPA, Zola, and Bboxx accounted for 58% of the total investments. This indicates that a majority of the funding was directed towards startups or scale-ups operating in Africa, where these ventures offer products and solutions to address energy access challenges.
Globally, 75% of the population lacks access to electricity, with 46% of them residing in Africa. However, equity investment in household solar startups remained low, signaling a critical need to nurture new companies focused on electricity access, essential for meeting electrification objectives.
“Data from 2023 indicates that without additional de-risking mechanisms and concessional financing, the off-grid solar sector will not achieve the necessary scale to fulfill global development targets. While there are already successful examples of blended finance structures that act as catalysts, more of these models are required to amplify industry funding by seven times,” Fortes emphasized.
