Cleantech takes center stage

Africa’s cleantech landscape is experiencing an unprecedented boom, fueled by abundant resources, a growing green consciousness, and significant investment.

Author

Anthony Miclet
December 12, 2023

Good morning. Zambia's Copperbelt Energy is set to raise $54m via a green bond by the end of this year, a move that would mark the South African nation’s first-ever green bond issuance.

Other top stories from the past week:

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Mixed markets

Bitcoin closes positive after crossing $42k; oil and gold slip

Bitcoin closed on a bullish note after crossing the $42k threshold earlier in the week. But on Monday, the world’s largest crypto posted its steepest drop in almost four months—sinking as much as 7.5%.

The loss came as traders moved to lock in profits following a more than 150% rally this year. Most major cryptocurrencies fell as well, Bloomberg reports. Gold and oil meanwhile closed the week in the red. In Africa, equities were largely positive last week. 

Special mention: Ghanaian stocks extended their turnaround last month, with the composite index rising by 44.28 points, a notable improvement compared to the previous month, which brings the year-to-date return to 29.71%.

Stalled growth

South Africa’s GDP contracts on power cuts, logistics

After two consecutive quarters of growth, Africa's most industrialized economy recorded a slight contraction in Q3 2023, as logistics constraints and a chronic electricity shortage took their toll.

Nearly all sectors of the economy showed minimal growth or decline—including agriculture, mining, and construction. 

The recent figures indicate that South Africa’s economy only expanded by 0.3% in the year's first nine months. "The economy has moved sideways... the numbers are just oscillating around zero," noted Joe de Beer, an official at the statistics agency.

Strong finish

At least six startups in Africa, led by Sportable, raise funding

Amid a global, all-year slump in venture capital deals, December has kicked off on a high as the first week saw at least six startups based or with operations in Africa announce funding rounds—led by Sportable’s $15m Series A.

The South Africa-founded startup deploys Micro-Tracking (MT) technology to enhance data collection and analysis in ball and contact sports, focusing on rugby, soccer, and American football. 

In the first nine months of 2023, African startups raised only $1.3bn, compared to $3.3bn and $2.9bn during the same period in 2022 and 2021, respectively. If sustained, the early December momentum signals a possible strong end to the year for Africa’s venture capital landscape.

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Our insight for the week

Get more context into events shaping Africa’s economic landscape.

Cleantech is driving FDI flows to Africa: Data from the latest EY Africa Attractiveness Report indicates a significant rebound in foreign direct investment (FDI) into Africa in 2022.

And perhaps surprisingly, the cleantech sector emerging as a primary driver of these investments. 

Africa is seeing a surge in cleantech FDI due to a growing "green revolution," particularly in the development of renewable energy infrastructure. 

But these clean energy investments are concentrated in a limited number of countries, namely South Africa, Egypt, Morocco, and Kenya.

Collectively, they have received about 75% of all renewable energy investments since 2010, totaling $46 billion. 

CleanTech has become the leading FDI sector in Africa.

Despite these investments, there is still a substantial shortage of clean energy, as fossil fuels continue to dominate Africa's power generation. 

Estimates from the International Renewable Energy Agency (IRENA) and the African Development Bank (AfDB) show that the continent has significant untapped potential, including 7,900GW in solar PV, 1,753GW in hydropower, and 461GW in wind energy.

Investors realize this and are increasingly backing founders working to tap this potential.

Over the past 12-18 months, several VC firms—among them big names Satgana, Catalyst Fund, Equator, and Nigeria-based EchoVC—have introduced funds to support startups in Africa's climate sector (including cleantech). 

CLICK HERE to read our summary of the EY report.

And in our next edition of Pulse54, we will delve into the cleantech sector in Africa, exploring the opportunity and active players—VCs and startups—in the space.

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