A new financing facility for commercial and industrial solar projects in South Africa is highlighting a problem that continues to constrain clean-energy investment across Africa: raising capital is difficult, but raising it in a currency that matches project revenues can be even harder.
Developing World Markets (DWM) closed an 80 million rand ($5 million) senior secured credit facility with Spark Energy Services, a commercial and industrial clean-energy financing platform managed by Camco, to support self-generation solar projects for businesses across Africa. The facility was announced on August 31 and is denominated in South African rand, allowing the debt to match the revenue profile of a major Spark project in South Africa rather than exposing the borrower to an additional foreign-exchange liability.
The structure addresses one of the less visible constraints facing renewable-energy developers in emerging markets. International investors frequently provide capital in dollars or euros, while solar projects often earn revenues in local currencies. When the local currency depreciates, the amount of local-currency revenue required to service hard-currency debt increases, potentially undermining otherwise viable projects.
The International Energy Agency has identified currency risk as a significant barrier to energy investment in emerging and developing economies. International lenders commonly provide hard-currency financing, while electricity revenues are generated locally, creating a mismatch that can increase default risk when currencies weaken. Hedging instruments such as forwards, swaps and options can reduce the exposure, but the IEA notes that they can be costly and difficult to access, particularly in less developed financial markets.
DWM and Spark have taken a different approach by putting the debt in the currency generated by the underlying asset. The facility is unhedged, meaning the transaction does not depend on a separate currency-hedging arrangement to protect the borrower from movements between the rand and a foreign currency. The significance of the structure extends beyond the $5 million transaction. Africa requires substantially more private capital to expand electricity access and clean-energy infrastructure, yet high financing costs, currency volatility and limited domestic capital markets continue to constrain the pipeline of bankable projects.
The IEA estimates that nearly 600 million people in Africa still lack access to electricity and that the continent needs around $15 billion of investment annually to achieve universal electricity access. Yet less than $2.5 billion was committed annually for new electricity-access connections in sub-Saharan Africa in 2023. Private finance accounted for less than 30% of those flows, with international sources providing the majority of private capital.
The financing challenge is particularly acute for decentralised energy. Mini-grids, standalone systems, captive solar and energy-efficiency projects can provide businesses and communities with alternatives where grid infrastructure is unreliable or unavailable, but their smaller scale and fragmented customer base can make them more difficult to finance through conventional project-finance structures.
For commercial and industrial customers, however, the economics can be more immediate. Businesses facing high electricity costs, unreliable supply or dependence on diesel generation have an incentive to invest in on-site solar and energy efficiency where financing can remove the upfront capital requirement.
Spark’s model is designed around that opportunity. The platform works with local developers and can provide up to 100% upfront financing for on-site renewable-energy and energy-efficiency equipment serving commercial and industrial businesses. Its portfolio has expanded rapidly. At the end of 2025, Spark reported $28 million in assets under management, 27 commercial and industrial businesses supported and 15 development partners, with 8.4 MWp of renewable-energy capacity operational or under construction. Its projects had also generated more than 11,000 MWh of energy savings and avoided more than 16,500 tonnes of carbon dioxide equivalent, according to Camco’s 2025 annual report.
The platform’s latest figures indicate that its footprint has continued to grow in 2026. Spark says it had supported 28 SME C&I businesses and reached 5.22 MWp of operational renewable capacity by March 31, while its longer-term target is to support 112 SME C&I businesses and 85 MWp of operational renewable capacity by 2030.
The model also illustrates how clean-energy finance is increasingly moving beyond the traditional assumption that renewable projects must be funded through large utility-scale transactions. Smaller solar systems installed on factories, farms, hospitals, schools, retail facilities and other commercial properties can collectively become a significant source of new generation while reducing the exposure of businesses to electricity-price volatility and supply interruptions.
South Africa provides a particularly important market for this approach because of the scale of its commercial and industrial electricity demand and the growth of embedded generation. The country’s electricity authorities are continuing to develop frameworks for small-scale embedded generation, including municipal processes for renewable-energy projects and wheeling arrangements.
But the financing gap remains broader than South Africa. Spark operates across several African markets, with projects and development partners spanning countries including Kenya, Uganda, Ghana, Nigeria, Tanzania and South Africa. Its expansion reflects a wider shift towards financing distributed energy assets through specialised platforms that can aggregate smaller transactions rather than requiring every project to secure separate conventional debt financing.
The IEA argues that such financing innovation will be essential if Africa is to accelerate electricity access. Its analysis estimates that nearly $150 billion of investment will be required to achieve universal electricity access in sub-Saharan Africa by 2035. Under its accelerated scenario, private finance would account for roughly 45% of total spending, with decentralised solutions representing an important share of that investment.
Domestic and local-currency financing will have a growing role in that transition. The IEA has argued that stronger domestic financial systems can reduce currency exposure, lower dependence on external shocks and improve the ability of investors to price local-market risks. Its clean-energy financing analysis projects a substantial increase in finance originating from or disbursed through local channels as African energy investment expands.
That does not mean international capital becomes less important. Rather, the challenge is to make international capital compatible with the financial realities of African projects. The DWM-Spark transaction demonstrates one possible route. Instead of requiring a South African project with rand-denominated revenues to absorb the foreign-exchange risk associated with dollar debt, the international investor provides capital in rand. The approach effectively transfers the currency decision from a hedging exercise into the original design of the financing.
The cost of the transaction remains an important unanswered question. DWM and Spark have not disclosed the interest rate or maturity of the facility, making it impossible to determine whether the local-currency structure also produces a lower overall cost of capital than conventional local debt or a hard-currency loan combined with hedging.
That distinction matters because currency risk is only one component of the financing challenge. The IEA notes that the cost of capital for electricity-access projects in Africa can be three to four times higher than for comparable grid projects in advanced economies. Reducing foreign-exchange exposure therefore needs to be accompanied by measures that address interest rates, project risk, regulatory uncertainty, offtaker quality and the limited availability of long-term capital.
The financing model nevertheless points to a broader opportunity for African financial markets. If local pension funds, commercial banks, development-finance institutions and impact investors can increasingly participate in renewable-energy transactions using structures aligned with local revenue streams, the continent could reduce some of its dependence on foreign-currency borrowing for domestic infrastructure.
For businesses, the benefit is potentially more direct. Reliable on-site renewable power can reduce electricity costs, improve operational resilience and allow companies to redirect capital that would otherwise be committed to energy infrastructure. For developers, access to upfront financing can expand the number of projects that can reach construction. For investors, aggregated C&I portfolios can provide a pathway into a market that would be difficult to access through individual small projects.
Camco’s wider portfolio illustrates this potential. The company reported that its managed platforms and funds had funded 342 MW of renewable-energy capacity by the end of 2025, alongside nearly 4,000 MSMEs and hundreds of critical services. The larger question for Africa is whether such structures can move from individual transactions to a broader financing market. The continent’s clean-energy transition will require much more than solar panels and batteries. It will require financial products that recognise local currencies, domestic revenue models and the realities of African businesses. Local-currency debt, guarantees, blended finance, aggregation and patient equity can all play different roles in making smaller renewable projects investable.
The DWM-Spark facility is therefore significant not because of its size, but because of what its structure attempts to solve. Matching the currency of debt with the currency of project revenues removes one layer of risk before construction begins.
As Africa seeks to attract the capital required to expand reliable and affordable clean energy, reducing that kind of avoidable financial mismatch could become as important as reducing the cost of the technology itself.
