Despite cleantech and climate tech startups receiving some of the largest shares of global climate financing year on year, the funds are often reserved for established firms with significant scale. Smaller African cleantech startups, which are critical to the continent’s energy transition, frequently struggle to secure early-stage capital. Facing limited local funding options, many are now turning to European crowdfunding platforms to finance their growth.

Platforms such as Energise Africa, Klimja, and Republic Europe have become key players in bridging this funding gap. These platforms allow retail investors in Europe to directly finance African clean energy and sustainability projects, offering debt or equity investments with varying risk and return profiles. While these models have enabled millions in capital flows, they also come with regulatory complexities, repayment risks, and questions about long-term sustainability.

One of the most active platforms for African cleantech fundraising is Energise Africa, operated by Lendahand Ethex Ltd. The platform specializes in solar energy bonds, allowing UK investors to fund off-grid solar projects in sub-Saharan Africa through its Innovative Finance ISA (IFISA), a tax-free investment vehicle introduced by the UK government in 2016.

The IFISA allows investors to allocate up to £20,000 per tax year into peer-to-peer loans and crowdfunded bonds, with returns exempt from UK income and capital gains tax. Energise Africa directs these funds into solar companies such as Altech Group in the Democratic Republic of Congo (DRC) and Roam Electric in Kenya.

• Altech’s solar bond (8% annual return) raised £334,750 to distribute 12,500 solar lanterns and 1,225 home systems, impacting 68,625 people.
• Roam Electric’s bond (6.75% return) secured £173,750 to expand electric motorcycle production, cutting transport emissions by 90% compared to petrol alternatives.

Energise Africa claims to have facilitated nearly £40 million in investments since its launch. However, risks remain:

• 5.2% of total borrowing has been written off.
• 14.5% of loans are overdue.
• Regulatory constraints limit participation to UK residents, excluding broader international investors.

The platform mitigates some risks through partnerships like CEI Africa, which provides €2.5 million in match funding to de-risk solar projects. Still, as with all crowdfunding, investors face potential capital loss and illiquidity.

“What is most compelling about this is that it has not come from a bank or investment fund, but from ordinary people in the UK who want to put their money to work fighting both the causes and the effects of climate change in developing economies. This is what compelled me to join Energise Africa. I have worked in the renewable energy sector before and been involved in impact investment and investments into developing economies,” CEO Ray Coyle said. 

Germany-based Klimja focuses on debt financing for renewable energy and efficiency projects across Africa, Latin America, and Asia. Unlike Energise Africa, Klimja does not offer tax incentives but provides retail investors with fixed-income opportunities in cleantech ventures. Some of the platform’s key projects include: 

• Green Solar and Battery Systems (East Africa): €245,850 raised to deploy solar solutions, avoiding 2,944 tons of CO₂.
• MPower Ventures (Africa-wide): €530,150 secured to expand solar leasing for households and SMEs.
• Hydrobox (Kenya): €278,000 invested in small hydropower plants.

Klimja’s model depends on proven business models, meaning early-stage startups may struggle to qualify. Additionally, its €50,000 minimum funding threshold for projects limits smaller initiatives.

Seedrs’s Republic Europe enables equity investments in African cleantech firms, appealing to investors seeking higher growth potential than debt instruments.

Zurich-based MPower, which provides solar solutions in Africa, raised £1.5 million (149% of its target) from 438 investors on Republic Europe. The company reported $1.9 million in 2023 revenue and plans to expand its distribution network.

While Republic Europe is FCA-regulated, equity crowdfunding remains high-risk. Unlike bonds, equity investments lack fixed returns, and exits depend on acquisitions or IPOs — rare for early-stage African startups.

Despite the growth of European platforms, crowdfunding in Africa has faced credibility issues. South Africa’s Uprise.Africa drew scrutiny after refunding investors in Sun Exchange’s solar leasing campaign amid regulatory delays. Later, its CEO was linked to a $1.4 million fake pledge scandal, damaging trust in local platforms.

European platforms mitigate some risks through stronger regulatory oversight, but challenges persist:

• Currency fluctuations can erode returns for Euro or GBP-denominated investments.
• Default rates remain higher than traditional asset classes.
• Limited secondary markets make exits difficult.

The Bottom Line

European crowdfunding platforms are filling a critical gap for African cleantech startups, providing access to capital that traditional lenders and VCs often withhold. Energise Africa’s solar bonds, Klimja’s debt financing, and Republic Europe’s equity model each offer distinct advantages — but none are without risk.

For African startups, these platforms represent a lifeline. For European investors, they provide a rare opportunity to support — and profit from — the continent’s clean energy transition. Yet, as the sector matures, greater transparency, stronger investor protections, and diversified funding structures will be essential to sustain this growing financial pipeline.

The table above shows African cleantech startups that have received funding from Energize Africa since its inception in 2017.