Mission 300: Unlocking capital for off-grid solutions in Africa
By Fanny Missfeldt-Ringius and Sarah Malm
When African Heads of State, government representatives, private sector leaders, development partners, and civil society participants gathered in Tanzania for the Mission 300 Africa Energy Summit, they did so against the backdrop of a continent that has seen off-grid solar solutions revolutionize energy access—with remarkable progress made and significant potential yet to be tapped.
Off-grid solar is positioned to be the most cost-effective way to provide about half of electricity access under Mission 300—the joint World Bank Group and African Development Bank initiative to connect 300 million people in Sub-Saharan Africa to electricity by 2030. Reaching millions of people across Africa with off-grid solutions has the potential to not only boost connectivity and resilience, but also to generate an estimated $5.6 billion in household savings and new income for families and provide power to two million micro-enterprises. It will create thousands of new jobs and accelerate the growth and impact of an industry that is already employing over 65,000 people across the continent and supporting a further 62,000 through informal work. Mission 300 provides a unique opportunity to catalyze the public and private finance needed to support the rapid scale-up of off-grid solar.
First, to attract private capital, public funding must account for a significant portion of the financing needed. This includes subsidies to make services more affordable and grants to de-risk investments in the most challenging areas—82% of those without electricity today live in remote, fragile, or conflict-affected regions. Government support for well-managed subsidy programs, including results-based financing, is crucial to reaching end users who struggle to afford services. When solutions are made more affordable, the increase in demand is immediate. For example, when subsidies were used to reduce the cost of solar home systems (SHS) within Nigeria’s National Electrification Program, 5.5 million people were connected in just two years. Growth was on a rapid upwards trajectory until the end of the program.
Second, commercial investment, both debt and equity, is crucial for scaling off-grid companies. Development actors can play a key role in leveling the playing field by de-risking investments and catalyzing equity funding through concessional, patient capital that will crowd in additional financiers. Models that incorporate financing in local currency, receivables financing, and emerging opportunities such as climate and carbon financing, will be integral to this transformation.
Off-grid companies targeting the world’s poorest communities often bear significant financial risk, but tailored financial interventions—like concessional capital and local currency financing—can reduce this risk and attract new investors. The World Bank Group, African Development Bank, and Mission 300 partners are expanding investment opportunities through platforms like Zafiri, which aims to mobilize up to $1 billion and close the equity gap in Africa’s renewable energy sector by providing patient equity to companies that advance distributed renewable energy solutions.
Third, governments are critical to attracting investment and building a supportive commercial ecosystem by integrating off-grid solar into electrification and energy transition plans, offering fiscal incentives, and redirecting fossil fuel subsidies and development finance to benefit unelectrified populations. Tax and tariff exemptions are essential to making off-grid solutions more affordable and signaling to private investors that the off-grid industry has the government support it needs to thrive. In Kenya, tax exemptions have been pivotal in developing the off-grid solar market, which now supplies over 10% of the population with electricity and Kenya has a burgeoning market for off-grid solar agricultural equipment, ICT applications and solar for larger commercial enterprises.
With innovation in technology and falling costs, over 560 million people are already benefiting from off-grid solar, the majority of whom live in sub-Saharan Africa. Thanks to its versatility and range of standalone modular products, off-grid solar technologies can adapt to the varying needs of households, public institutions, farms, and enterprises—supporting a range of development objectives including better health, productivity, food security and climate resilience. When it comes to reaching the Mission 300 target, and universal energy access more broadly, investments in distributed renewable energy solutions are key to ensuring that the most remote, hard to reach populations in Africa do not get left behind.
