• Hybrid financing models are reshaping Africa’s energy sector as traditional private equity acquisitions decline but clean investment grows upwardly

• Sun King’s $156m securitization shows how PAYG solar assets can attract local banks, DFIs and investors to expand affordable energy access Now.!

• Regulatory progress and wheeling-ready platforms are enabling scalable clean power transfers as hybrid finance gains momentum across Africa yes!

In the first nine months of 2025, Africa’s private equity (PE) market recorded 114 acquisition transactions valued at $618 million, according to the DealMakers AFRICA Q3 2025 report. This represents a 33 per cent decline from the 2022 peak of 326 acquisition deals. On the surface, these figures suggest a clear deceleration, but they only tell part of the story. A deeper look reveals that Africa’s investment landscape is undergoing a structural shift rather than a simple contraction.

This is because DealMakers AFRICA focuses strictly on PE acquisition activity, excluding venture capital, private debt, infrastructure equity, mezzanine financing and fundraising. By contrast, the African Private Capital Association (AVCA) tracks the entire private capital spectrum, often reporting more than 300 transactions over the same period.

What appears to be a contradiction between sources is actually a question of scope: PE buyouts and expansion deals have slowed, while other segments of private capital—particularly energy, infrastructure and debt—remain resilient or are even expanding. This distinction is essential for understanding why headline figures underestimate the transformations occurring beneath the surface.

Beneath these moderated PE numbers lies a quiet but powerful reconfiguration of how Africa finances its clean energy transition. Instead of relying solely on traditional buyout capital, the continent is seeing rapid growth in hybrid financing models that blend commercial banks, development finance institutions and private equity to scale renewable energy solutions. With 600 million people still lacking access to electricity according to the IEA’s World Energy Investment 2025, these structures offer a more pragmatic and scalable way to close the continent’s energy access gap.

Sun King and the Rise of Scalable Hybrid Finance

One of the most illustrative examples of this new paradigm is Sun King’s $156 million securitisation announced on July 28, 2025, in Kenya. It is the largest solar pay-as-you-go (PAYG) securitisation outside South Africa and the first in sub-Saharan Africa to be majority-financed by commercial banks. Structured by Citi, with Stanbic Bank Kenya as placement agent, the transaction includes a senior tranche taken up by central Kenyan banks and an additional mezzanine tranche subscribed by British International Investment, FMO and Norfund. This structure transforms millions of future PAYG customer repayments into investable securities under Sun King’s Sustainable Financing Framework, which has been rated “Very Good” by Moody’s Second Party Opinion.

The capital raised will finance 1.4 million solar home systems and smartphones, allowing low-income households to purchase products through daily mobile money payments as low as KES 25, or about nineteen US cents. Since its founding in 2007, Sun King has disbursed $1.3 billion in solar loans to nearly 10 million customers across Africa, demonstrating a proven business model anchored in consumer repayment data. Co-founder Anish Thakkar described the transaction as a signal of growing confidence among African banks in the viability of PAYG solar models and a catalyst for accelerating universal energy access.

Sun King’s securitisation stands out even more given the regional market context. East Africa recorded only 27 PE acquisition deals worth $51.6 million in the period reviewed—down 67 per cent from 2022. Yet the region is simultaneously witnessing a surge in clean energy investment, with private capital for renewable technologies tripling from $17 billion in 2019 to $40 billion in 2024, according to the IEA. The Sun King deal shows how bundling small consumer loans into structured, rated instruments can derisk the sector and draw in local commercial capital at a scale that DFIs alone cannot match.

Wheeling, Regional Shifts and the Broader Redefinition of Investment

Alongside off-grid securitisation, wheeling—the practice of allowing independent power producers to transmit electricity to private consumers through national grids—is emerging as another frontier for hybrid finance. Regulatory frameworks in Kenya, Zambia, Morocco and Egypt now permit direct or semi-direct power purchase arrangements using existing grid infrastructure. Although overall M&A and PE acquisitions in Africa have slowed, wheeling-ready platforms and related renewable infrastructure remain among the few segments still attracting investment.

Firms such as Discovery Green are developing integrated solutions that combine private equity, infrastructure finance and digital technologies for storage-enabled solar and wind projects. Meanwhile, CrossBoundary Energy’s MIGA-guaranteed portfolio continues to expand, with hundreds of megawatts of solar, wind and storage assets operating across twenty countries and more than $150 million deployed as of mid-2025.

These developments unfold as regional investment dynamics shift. Mauritius surged to the top of PE acquisition value in 2025, recording $1.25 billion across six deals—an increase of over 300 percent year-on-year—and overtaking Nigeria, which recorded $987.5 million across forty-five transactions. As a jurisdiction hosting more than 450 funds managing over $40 billion, Mauritius continues to serve as a structuring hub for renewable energy platforms targeting pan-African expansion.

DealMakers editor Marylou Greig describes private equity as a reliable engine of consolidation and long-term value creation on a continent with the world’s fastest-growing working-age population. Yet, as Oak Group’s Zoubeir Khatib argues, private equity’s future relevance in Africa will increasingly depend on its ability to innovate, partner with local institutions and adopt hybrid financing tools tailored to the continent’s unique market realities.

Looking ahead, the scale of Africa’s energy transition underscores why these hybrid models matter. The IEA estimates that the continent will require $200 billion annually by 2030 to meet its energy and climate objectives, including $25 billion dedicated each year to achieving universal energy access. Clean energy already accounted for 36 per cent. Cent of Africa’s $110 billion energy spending in 2024, a sharp increase from the stagnation seen before 2021.

If structures like Sun King’s securitisation and wheeling-enabled financing platforms continue to expand, they could unlock unprecedented volumes of local and international capital. An option which was at the heart of the discussion at the recent Africa Investment Forum in Rabat, Morocco. With up to fourteen million jobs potentially created by 2030, Africa’s evolving financial architecture may determine not only the pace of its renewable transition but also its broader economic transformation.

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