New report highlights US$21B funding gap to achieve universal energy access via off-grid solar

GLOBAL – A new report from the World Bank’s Energy Sector Management Assistance Program (ESMAP) and the Global Off-Grid Lighting Association (GOGLA) has highlighted a critical funding gap in off-grid solar investments needed to achieve universal energy access.

The “Off-Grid Solar Market Trends Report 2024,” published on October 8, emphasizes that an additional US$21 billion is required to fully harness the off-grid solar sector’s potential, especially in sub-Saharan Africa, where more than 80% of the population remains without electricity.

The report states that investments in off-grid solar reached $1.2 billion in the 2022/23 period, largely fueled by debt financing.

However, under current funding trajectories, an estimated 660 million people will still be without electricity by 2030.

A six-fold increase in investment is needed to meet the growing demand for off-grid solar solutions, particularly in regions struggling with energy poverty.

Beyond basic electrification, a further US$74 billion is required to address the market for solar water pumps, cold storage, and higher-tier solar solutions aimed at small businesses and microenterprises.

These technologies can significantly improve remote areas’ agricultural productivity, healthcare, and business operations.

The World Bank has partnered with the African Development Bank under the Mission 300 initiative, which seeks to connect 300 million people to electricity across Africa within six years.

According to Qimiao Fan, World Bank Country Director for Kenya, Rwanda, Somalia, and Uganda, off-grid solar will bring electricity to households, businesses, schools, and healthcare centers, unlocking sustainable development across multiple sectors.

Off-grid solar has already demonstrated its impact, providing 55% of new electricity connections in sub-Saharan Africa between 2020 and 2022.

The report stresses that off-grid solar represents the most cost-effective means of electrifying 398 million energy-deprived people globally by 2030.

Despite the progress, challenges such as affordability remain significant, with only 22% of households able to afford the payments for basic solar kits.

The problem is even more pronounced in conflict-affected regions, where prices for pay-as-you-go solar solutions are 57% higher.

Sarah Malm, GOGLA’s executive director, called on governments, investors, and development partners to unite efforts to close the funding gap and build a financially sustainable solar sector.

This, she emphasized, would be essential to achieving energy access goals and supporting broader climate targets.

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