For years, the narrative around African tech investment was dominated by venture equity: high-growth startups chasing “unicorn” status. But as global markets have cooled, a different, more durable wave of capital is moving in.

In the opening weeks of 2026, a series of major commitments from European and North American development finance institutions (DFIs) and institutional giants like Allianz have signaled a shift. The focus has moved from pure software to the “hard” sectors: climate-resilient agribusiness, energy efficiency, and the micro-lending infrastructure that powers the continent’s small businesses.

This isn’t just charity; it is a sophisticated experiment in blended finance — using public money to “de-risk” investments so that private pension funds and insurance giants finally feel comfortable entering the African market.

The $1bn Benchmark: Allianz and the ACE Fund

The most significant signal comes from the launch of the Allianz Credit Emerging Markets fund (ACE). With an anchor investment from British International Investment (BII), the fund is chasing a total of $1 billion.

The structure is a classic “waterfall” model designed to entice private capital:

• The Junior Tranche: $150m of “concessionary” capital (the first-loss layer) provided by BII, Global Affairs Canada, and others.
• The Senior Tranche: Up to $850m sought from private institutional investors like Allianz SE and GastroSocial Pensionskasse.

By absorbing the initial risk, the public backers are attempting to solve the “perception of risk” problem that has historically kept African climate projects underfunded. Crucially, 40% of the ACE fund is earmarked for Africa, targeting renewable power, clean transport, and agriculture.

Debt as a Tool for Climate Scaling

While equity often gets the headlines, debt is what builds infrastructure. DEG, the German development finance arm, has recently doubled down on this via two major channels:

1. Africa Go Green (AGG): DEG provided a €30m loan to this fund, managed by Cygnum Capital. Unlike traditional banks that shy away from the long-term horizons of climate hardware, AGG provides medium-to-long-term debt for industrial energy efficiency, e-mobility, and green buildings.
2. REGMIFA: DEG committed $20m to the Regional MSME Investment Fund for sub-Saharan Africa. This fund doesn’t lend to startups directly; it lends to local banks and microfinance institutions in local currency. This removes the “forex trap” — where a business earns in Naira or Shillings but owes debt in Dollars — which has killed many promising African firms during currency fluctuations.

Climate-Resilient Agribusiness: The Sahel Strategy

Agriculture remains the backbone of most African economies, but it is also the sector most vulnerable to climate change. Sahel Capital recently hit a $29m first close for its Agribusiness Fund II (SCAF II), led by Germany’s KfW.

Targeting Nigeria, Ghana, Côte d’Ivoire, and Senegal, SCAF II is looking for more than just “farming.” It is targeting the entire value chain, with a specific mandate for climate-resilient business models.

“The focus is on domestic supply chains that link agribusinesses with smallholder farmers,” says Oliver Van Bergeijk, Head of Division for Equity and Funds at KfW.

The goal is to reduce the continent’s reliance on food imports by making local production more efficient and weather-resistant.

Summary of Recent Funding Inflows (Q4 2025 — Q1 2026)

Why This Matters for the Ecosystem

For African founders, this “New Wave” suggests a maturing landscape. The reliance on Silicon Valley-style equity is being supplemented by structured debt and hybrid instruments.

However, a challenge remains: accessibility. Much of this capital is “indirect,” flowing through local commercial banks or large-scale project developers. For a mid-sized climate tech startup in Nairobi or Lagos, the hurdle is no longer just “is there money available?” but rather “can I meet the rigorous ESG and reporting standards required by these DFI-backed funds?”

As we move through 2026, the success of these funds will be measured not by the billions committed, but by how much of that capital actually reaches the “missing middle” — the small and medium enterprises that form the real engine of Africa’s green transition.