EXCLUSIVE: Off-grid solar’s decade of data wins over local banks
Off-grid solar spent nearly a decade building the audited, standardised performance data investors needed, and in 2025 eighteen new investors arrived, local banks among them. Speaking to ENN ahead of the Global Off-Grid Solar Forum in Kigali, Laura Fortes, Finance and Investment Associate Director at GOGLA, says these deals are the first examples of a pipeline she expects to keep growing.
Local currency accounted for 47.2% of total off-grid solar sector investment in 2025, having represented 3% of transactions the year before, a shift Laura Fortes attributes to nearly a decade of groundwork finally clearing the bar commercial lenders set.
Rating a PAYGo receivable now requires a seasoned, diversified pool with enough history for an agency to model default and prepayment, standardised and ideally audited reporting, and often credit enhancement alongside. Almost nothing in the sector could have met that bar five years ago, when portfolios were too young, reporting was not standardised, and no book had performed through a real stress period.
That track record is what brought eighteen new investors into the sector in a single year, spanning local banks, development finance institutions, foundations and impact funds. Fortes says a commercial bank first needed a repayment history long enough to show default and collection rates, backed by audited financials. It also needed a currency structure that left it carrying no foreign exchange risk. Nearly a decade of PAYGo repayment data from operators working across several countries, now with external ratings on their receivables portfolios, supplies that history, and Nigeria’s more predictable policy and exchange rate environment gave banks the confidence to move.
Sector-wide debt financing rose 178% in 2025 to $150 million, the large majority at scale-up level, where receivables-backed debt has become the dominant instrument. Fortes is explicit that Sun King’s two securitisations and d.light’s green bond are first examples, not outliers or a ceiling, and points out that only a few companies being cited at this stage means there are dozens more for investors to look at.
Extending the same structures to seed and early-stage companies runs into portfolio size, which Fortes describes as solvable rather than fundamental. Securitisation works because a pool with enough size and history can absorb individual defaults without moving the average, and aggregation vehicles pooling receivables across several smaller operators would produce a combined book large enough to rate, with guarantee or first-loss capital underneath it.
The least comfortable number in the data sits with locally owned operators, where total investment fell to $9.9 million in 2025 from $84.6 million two years earlier. First-time companies funded dropped from 52 to 25, which Fortes ties largely to donor grant programmes contracting.
Capital is concentrated in Nigeria and East Africa, markets where regulation and operator track records have made the sector investable and where the banking sector functions. Southern Africa sits where Nigeria sat a few years ago, and Fortes argues the groundwork is now a known quantity because Nigeria has just demonstrated it.
In the next report, Fortes will be watching whether blended finance vehicles actually get built and deployed toward earlier-stage and locally owned companies, and whether local currency holds its share above where it sat before 2025. She also wants to see the banks that entered in 2025 come back for a second and third deal.
“The hard part is done,” she says of what she wants investors arriving in Kigali to understand. “This sector spent the better part of a decade building the thing investors always said they needed before they’d engage at institutional scale. That now exists. The next move isn’t a leap of faith, it’s an extension of something already proven.”
Images: GOGLA
