Arnergy, a pioneering Nigerian provider of distributed renewable energy solutions, has closed an $18 million funding round to supercharge the rollout of solar-plus-storage systems throughout Africa Tech In Africa. Led by All On—an off‑grid energy impact investor seeded by Shell—with participation from Breakthrough Energy Ventures (Bill Gates’ climate‑tech fund), ElectriFI (the EU‑backed Electrification Financing Initiative), and a cohort of new climate‑focused backers, the capital injection marks one of the largest growth‑stage raises by an African solar company this year Tech In Africa. Arnergy’s CEO, Femi Adeyemo, describes the round as “a strong vote of confidence in our mission to democratize energy access across Africa,” signaling robust investor conviction in distributed solar’s role in powering sustainable development Tech In Africa.

From Modest Beginnings to Market Leader

Founded in 2013 by former management consultants Femi Adeyemo and Kunle Odebunmi, Arnergy began by supplying small rooftop systems to Nigerian homes frustrated by daily blackouts. After closing a $9 million Series A in 2019 and a $3 million bridge round in early 2024, the company has rapidly scaled its offerings, deploying over 7 MW of photovoltaic capacity and 20 MWh of battery storage across hundreds of commercial and residential clients Tech In AfricaHadu. Prior to these expansions, Arnergy had already electrified more than 2,000 customer sites with 2 MW of clean generation, demonstrating both product reliability and strong demand for decentralized power solutions Tech In Africa.

Addressing Africa’s Massive Energy Deficit

Despite Africa’s abundant solar resources, roughly 600 million people in sub‑Saharan Africa still lack reliable electricity access, more than any other region in the world IEAIEA. In countries like Nigeria—the continent’s most populous—only about 45 percent of the population enjoys continuous grid supply, forcing millions to rely on polluting and costly diesel generators. This energy gap not only hinders economic growth but also exacerbates health risks from indoor air pollution, underscoring the urgency of distributed renewable solutions Nordic Development Fund.

Seizing a Booming Solar Opportunity

Africa’s solar sector is on the cusp of rapid expansion. According to the Global Solar Council, the continent installed 2,402 MW of new solar PV in 2024, and is projected to double its cumulative capacity by adding 23 GW between 2025 and 2028 Global Solar Council. Annual installations are expected to surge by 42 percent in 2025 alone, driven by governments’ green targets and falling equipment costs. Yet, despite representing 60 percent of the world’s best solar resource zones, Africa accounted for only 3 percent of global solar installations in 2023, highlighting immense untapped potential Global Solar Council.

Strategic Backers Power the Vision

The new $18 million raise brings together an eclectic mix of impact‑driven and strategic investors. All On, seeded by Shell Foundation, has committed over $100 million since 2016 to off‑grid energy ventures in Nigeria, aiming to unlock economies of scale through its DART procurement programme—now a $25 million facility that lowers equipment costs by standardizing bulk purchases Energy Alliance. Breakthrough Energy Ventures, Bill Gates’ $1 billion climate‑tech fund, invests in high‑risk, high‑reward technologies with the potential to reach net‑zero emissions by 2050, signaling deep‑tech confidence in Arnergy’s growth pathway. Meanwhile, ElectriFI’s EU‑funded blending facility deploys technical assistance and risk capital to clean energy companies in emerging markets, helping close the financing gap for projects that conventional investors shy away from EDFI MC.

A Distributed Model with Broad Impact

Arnergy’s solar‑plus‑storage systems—which can seamlessly switch between grid, solar, and battery power—are tailored for commercial & industrial (C&I) clients such as hotels, manufacturing plants, and telecom towers, where downtime can cost thousands of dollars per hour. The company also offers residential packages on a pay‑as‑you‑go (PAYGo) basis, enabling households to adopt clean power without large upfront outlays. This hybrid approach not only diversifies Arnergy’s revenue streams but also addresses energy needs across the socio‑economic spectrum.

Tackling Financing Barriers in Africa
Though solar hardware costs have plunged 80 percent over the past decade, Africa’s financing costs remain 3–7 times higher than in developed markets, due to currency risk, high interest rates, and limited credit history Global Solar Council. As a result, clean energy investment in Africa reached only $40 billion in 2024—merely 3 percent of global energy transition capital—far short of the $200 billion per year needed to meet climate and access goals Global Solar CouncilBBHub. By leveraging patient capital from impact investors and deploying innovative credit models, Arnergy seeks to de‑risk projects and attract follow‑on funding from local banks and development financiers.

Global Energy Transition: A Record Setting Year
Worldwide, investment in the energy transition broke records in 2024, hitting $2.1 trillion, driven by electrified transport, renewables, and grid upgrades—up 11 percent year‑on‑year BloombergNEF. Of that, $728 billion flowed into renewable energy alone, underscoring the sector’s resilience and investor appetite Renew Africa. Africa’s share, however, remained modest; in 2023, the continent accounted for just 2.3 percent of global renewable energy investments, even as its installed capacity doubled over the past decade BBHub. Arnergy’s latest funding round seeks to plug this investment shortfall by demonstrating scalable, profitable off‑grid business models.

Harnessing Policy & Regulatory Tailwinds
African governments and regional bodies are stepping up support for decentralized renewables. The African Union has committed to installing 300 GW of renewable capacity by 2030, requiring an average of 32.6 GW of new additions per year—nearly quadruple the current pace BBHub. In Nigeria, the Rural Electrification Agency and Ministry of Power have launched reforms to streamline approvals for mini‑grids and pay‑as‑you‑go solar, while tax incentives and reduced import duties aim to lower equipment costs. Such policies create fertile ground for Arnergy’s expansion beyond Nigeria into markets like Ghana, Kenya, and Senegal.

Driving Inclusive Economic Growth
Reliable power is more than a convenience—it’s a catalyst for enterprise. A recent study by the World Bank found that every 10 percent increase in electrification in sub‑Saharan Africa is associated with a 1.5 percent rise in GDP per capita, driven by productivity gains in agriculture, manufacturing, and services World Bank Group. Arnergy’s clients—ranging from a Lagos‑area poultry farm that doubled its output after solar installation to a rural health clinic that slashed vaccine spoilage by 90 percent—underscore the transformative power of consistent electricity.

Expanding Across Borders
With the fresh capital, Arnergy plans to launch local subsidiaries in three additional African markets by year‑end, tailoring financing structures to each country’s regulatory framework and currency environment. The company will also invest in digital monitoring platforms—powered by IoT sensors and AI analytics—to optimize system performance and preempt maintenance issues. This technology infusion is expected to improve uptime to 99.8 percent, ensuring clients remain powered even during grid outages.

A Human Touch: Lighting Lives
Beyond megawatts and balance sheets lie human stories: a rural school whose evening study sessions have extended from two to five hours; a mother of four whose home now enjoys stable lighting for her children’s schoolwork; and artisans in Kano whose welding shops can operate safely without diesel fumes. These narratives highlight the social impact that underpins Arnergy’s commercial success and attracts investors focused on Sustainable Development Goals International Energy Forum.

Looking Ahead
As subscription opens for the $18 million round, with allocations exclusively for accredited investors, industry watchers anticipate strong demand from family offices, development finance institutions, and global impact funds. Arnergy’s leadership team—anchored by co‑founders Adeyemo and Odebunmi, and fortified by veteran CFO and a seasoned board—believes that achieving 20 percent continent‑wide market share in the C&I segment by 2028 is within reach.

Conclusion: Powering a Sustainable Future
Arnergy’s latest financing milestone exemplifies the convergence of technology, capital, and entrepreneurship required to tackle Africa’s energy challenges. By marrying innovative solar‑plus‑storage designs with flexible financing and robust execution capabilities, the company is well‑positioned to light up communities, fuel businesses, and catalyze inclusive growth. As the global energy transition accelerates, Arnergy’s journey offers a blueprint for how distributed renewables can deliver both impact and returns across emerging markets.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

22nd April, 2025