Productive renewable energy (PURE) technologies, particularly those related to solar irrigation and cold chain, saw increased investor interest last year, despite a 43% decline in funding in the global off-grid solar sector.
Global off-grid solar energy industry association GOGLA says PURE Technologies raised $65 million in 2023, double the previous year, reflecting growing investor interest in the segment. Startups that raised money in the sector last year include Figorr, which offers storage and transportation of temperature-sensitive products.
PURE technologies include devices and products such as solar-powered water pumps, refrigerators, cold rooms and agricultural processing equipment that enable improved or new revenue-generating activities, primarily in the agricultural sector.
Laura Fortes, senior access to investment manager at GOGLA, told TechCrunch that the technologies are attracting interest due to their transformative impact on livelihoods through innovation.
“These solutions mitigate climate change, increase resilience and provide increased income opportunities for beneficiaries, including small farmers and health clinics. By replacing aging diesel water pumps and chillers that rely on fossil fuels, especially in the face of climate change, they are strengthening the resilience and incomes of small farmers,” said Fortes.
In total, the off-grid solar sector raised $425 million through 158 deals last year, including $281 million in debt. Sun King, d.light, Engie Energy Access, M-KOPA, Zola and Bboxx accounted for 58% of the total investments. This shows that the majority of the funding went to start-ups or scale-ups with a presence in Africa, where these companies provide products and solutions to address the lack of energy access.
Globally, 75% of the population has no access to electricity, 46% of whom come from Africa. Still, equity investment in private solar startups remained low, which GOGLA says is a worrying failure to nurture new companies focused on access to electricity, which will be critical to achieving electrification goals.
“The 2023 investment data shows that without further risk mitigation tools and concessional financing, off-grid solar energy will not reach the scale needed to achieve global development goals. While there are already many examples of successful, catalytic blended finance structures, we need more of them to increase industry funding sevenfold,” said Fortes.