African Climate Tech is the continent’s most-funded sector. That’s according to a report developed by Briter, in partnership with Catalyst Fund, BFA Global, and FSD Africa, with funding data support from Africa: The Big Deal. The report notes with funding growing from $206 million in 2016 to $1.5 billion in 2025, the sector now accounts for nearly 40 per cent of all disclosed venture capital. Audrey Chebet, Senior Research Associate at Briter Bridges joins CNBC Africa to unpack how the ecosystem is evolving and near-term outlook.
Wed, 15 Jul 2026 14:57:15 GMT
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Key Points:
- African climate tech funding rose from $206 million in 2016 to $1.5 billion in 2025.
- The sector now accounts for nearly 40% of all disclosed venture capital in Africa.
- Briter says climate tech should be viewed as multiple markets rather than a single sector.
- Energy generation is among the most mature segments, with proven technology and clearer scaling pathways.
- Water management, waste-to-value and parts of the circular economy remain earlier-stage and are still testing unit economics.
- Funding is heavily concentrated in Kenya, Nigeria and South Africa.
- Energy leads sector funding, while electric mobility has grown sharply in recent years.
- The top 10 companies have raised roughly twice as much as the other 600-plus firms in the dataset.
- A major financing gap exists between early experimentation and later commercial traction.
- Debt is becoming more important in the financing mix, though equity still dominates.
- Different climate tech applications require different blends of grants, equity, debt, subsidies and working capital.
- Policy, regulation and infrastructure are critical to scaling innovation and should be treated as part of the investment case.
Topics
Africa climate techBriterventure capitalAfrican startupsclimate financeenergy generationelectric mobilityKenyaNigeriaSouth AfricaCatalyst FundFSD Africa
African climate tech has become the continent’s best-funded sector, drawing $1.5 billion in 2025 and accounting for nearly 40% of all disclosed venture capital, according to a new report from Briter and partners. But beneath the headline growth, researchers say the ecosystem is far from uniform, with capital heavily concentrated in a handful of markets, business models and companies.
The report, developed by Briter in partnership with Catalyst Fund, BFA Global and FSD Africa, with funding data support from Africa: The Big Deal, shows how sharply the sector has expanded over the past decade. Funding rose from $206 million in 2016 to $1.5 billion in 2025, underscoring investor appetite for businesses tackling energy access, mobility, water, waste and other climate-linked challenges across the continent.
Speaking in a television interview, Audrey Hebert, senior research associate at Briter Bridges, said one of the report’s central conclusions is that African climate tech should not be treated as a single market.
Instead, she said, it is made up of multiple applications and sub-sectors, each moving at different speeds and requiring different forms of support. Those include energy generation, water access and management, carbon-related solutions and circular economy businesses, among others.
“One of the significant shifts that we’re seeing is that there’s more participation in terms of the companies and the innovations that are happening within the space,” Hebert said. But she added that funding growth alone does not necessarily mean all parts of the ecosystem are maturing equally.
That divergence is especially visible at the application level. Energy generation, including solar home systems, is among the most mature segments of the market, according to the report. In those businesses, the technology has often already been proven, business models are better understood and policy pathways for scaling are relatively clearer.
That uneven development is mirrored geographically. The report finds funding is concentrated in a small number of African markets, with Kenya, Nigeria and South Africa leading the field. Sector concentration is also pronounced, with energy receiving the largest share of capital and mobility emerging strongly in recent years, particularly around light electric mobility, electric road vehicles and buses.
Hebert said the concentration extends beyond countries and sectors to individual firms. The top 10 companies in the dataset have raised roughly twice as much as the rest of the more than 600 companies covered in the report, highlighting how aggregate figures can obscure disparities across the broader ecosystem.
The findings suggest that while climate tech is attracting record levels of investment, many startups are still struggling to bridge key financing gaps. According to Hebert, these gaps are not best understood simply by broad sector labels such as energy or agriculture, but by looking more closely at specific applications and where they sit in their development cycle.
Briter’s research identifies a critical shortfall in financing between early experimentation and a later phase of investor momentum. Hebert described this as the gap between an “eruption phase,” when testing and experimentation are taking place, and a “frenzy phase,” when investor interest scales materially. It is in this transition, she said, that many innovations stall.
The implication for investors and policymakers is that the challenge is not only to mobilize more money, but to ensure startups receive the right type of capital at the right time. In some cases, inappropriate financing can actually slow progress rather than accelerate it.
“What we’re really saying is that we need the right type of money at the right time,” Hebert said.
On the composition of funding, the report finds that debt is becoming an increasingly important part of the climate tech financing mix, even though equity continues to dominate overall. Still, Briter cautions against assuming the sector is converging toward a single model.
Rather, climate tech companies often require different blends of grants, equity, debt, subsidies and working capital depending on the application and the stage of maturity. A waste-to-value company, for example, may need concessional support and blended finance to move from pilot stage to commercial scale, while a more established energy generation business may have a clearer path to debt and equity markets.
Hebert said the key question is not whether the sector needs more grants or more debt in the abstract, but what the capital stack should look like for each business model. Some companies may rely less on grants as they become commercially later stages
The report also stresses that policy and regulation are central to determining how quickly climate solutions can scale. Regulatory uncertainty, customs bottlenecks, infrastructure shortfalls and unclear market rules can all increase costs and delay deployment, particularly in emerging categories such as carbon markets.
Hebert argued that investors should treat policy conditions and market infrastructure as part of the business case, rather than as secondary considerations. In practical terms, that means scaling climate innovation in Africa will require not just capital, but clearer regulatory frameworks and more supportive market conditions.
The broader message from the report is that African climate tech’s rapid rise is real, but the next phase of growth will likely depend on a more nuanced approach. Headline funding numbers may signal momentum, yet sustained progress will require tailored financing, stronger policy alignment and wider distribution of capital beyond the best-known markets and companies.
For a sector now commanding the largest share of venture funding on the continent, the challenge is no longer simply proving investor interest. It is ensuring that capital, policy and execution are aligned well enough to turn a fragmented wave of innovation into scalable climate solutions across Africa.
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