Hybrid financing structures are emerging as a powerful force in Africa’s clean-energy transition, even as traditional private equity activity appears to slow across the continent. New data from the DealMakers AFRICA Q3 2025 report shows that private equity acquisitions fell sharply, with only 114 deals worth $618 million recorded in the first nine months of 2025, a drop of more than 33% compared to 2022. Yet industry analysts caution that these figures do not capture the full landscape of investment, as they exclude private debt, infrastructure finance, mezzanine funding, and other forms of capital that continue to expand.
Rather than signaling a decline, experts say these shifts represent a structural change in how clean-energy projects are being financed. Hybrid or blended financing, models that combine commercial bank lending, development finance institutions (DFIs), private equity, and structured-finance tools, has become central to scaling renewable energy solutions in Africa. This trend is driven in part by the continent’s persistent energy access gap, with an estimated 600 million people still lacking reliable electricity, according to the International Energy Agency’s World Energy Investment 2025 report.
One of the most notable developments in this space is the $156 million securitization deal announced by Kenyan solar company Sun King in July 2025. It is the largest solar pay-as-you-go (PAYG) securitization ever executed outside South Africa and the first in sub-Saharan Africa to be primarily financed by commercial banks. Structured by Citi, with Stanbic Bank Kenya acting as placement agent, the transaction converts future PAYG customer repayments into tradable, rated securities under Sun King’s Sustainable Financing Framework, which earned a “Very Good” second-opinion rating from Moody’s. The financing will support the distribution of 1.4 million solar home systems and smartphones, allowing low-income households to make daily digital payments starting from KES 25.
Sun King, established in 2007, has already issued around $1.3 billion in solar loans to more than 10 million customers, underscoring how hybrid financial structures are enabling energy access at scale. But the trend extends beyond off-grid solar. The rise of wheeling, a mechanism allowing independent power producers to transmit electricity to private consumers through national grids, is gaining momentum across Kenya, Zambia, Morocco, and Egypt. This approach allows clean-energy producers to sell directly to large private buyers, supported by emerging regulatory frameworks that make such agreements feasible.
Energy developers are increasingly packaging solar, wind, storage, digital technology, and multiple financing layers into integrated solutions. Renewable-energy portfolios such as CrossBoundary Energy’s continue to expand across the continent, deploying significant capacity in markets where demand for low-carbon power is surging. Meanwhile, shifts in investment hubs are becoming more visible. Mauritius, for example, recorded $1.25 billion in private equity transaction value in 2025, overtaking Nigeria as a preferred platform for structuring renewable-energy investments in Africa.
Despite a slowdown in classic mergers and acquisitions, private equity remains an important component of Africa’s long-term clean-energy growth, though it is adapting by aligning more closely with local institutions and embracing hybrid financing tools suited to the region’s energy markets. The IEA projects that Africa will require about $200 billion annually by 2030 to meet its energy and climate goals, including $25 billion per year to achieve universal electricity access. Clean energy already accounted for 36% of the continent’s $110 billion energy spending in 2024, showing a clear upward trend.
As hybrid financing structures continue to evolve, they are expected to unlock larger pools of local and international capital, accelerate renewable-energy deployment, and support broader economic transformation across Africa.
