Matchmaking power: expanding climate finance for off-grid solar electricity

The document argues that off-grid solar (OGS) is a critical tool for achieving universal energy access and climate mitigation, particularly by replacing kerosene lamps and reducing black carbon emissions. Despite this, multilateral climate finance institutions have invested only a small fraction of the total capital deployed in the sector. The briefing identifies barriers such as the complexity of projects that combine mitigation, adaptation, and development, as well as a focus on large-scale projects. It recommends strategies including increased concessional financing for early-stage businesses, expanded use of blended finance to attract commercial equity, and the development of a uniform methodology to quantify the climate benefits of OGS, specifically regarding black carbon.

• Off-grid solar (OGS) is projected to be a primary driver for energy access, with decentralized solutions expected to provide 50% of new electricity access by 2030, and up to 72% if SDG 7 is to be fully achieved.
• The primary climate mitigation benefit of OGS is the reduction of black carbon emissions from kerosene lamps, which have a net warming effect. GOGLA estimates that OGS products sold by its members since 2010 will reduce emissions by 66.6 million tonnes of CO2e over their lifetimes.
• Substantial investment gaps exist in sub-Saharan Africa; providing electricity to a third of households in the region by 2030 would require US$943 million in grants, US$11.3 billion in equity, and US$13.4 billion in debt.
• Multilateral climate finance institutions have under-invested in OGS due to the difficulty of approving projects that simultaneously integrate mitigation, adaptation, and development, as well as a preference for larger projects over early-stage funding.
• OGS companies face significant financial risks, including currency fluctuations because they pay for equipment in foreign currencies but receive payments in local currencies, and challenges associated with the pay-as-you-go (PAYGo) model's delayed cash flow.
• Current carbon markets do not recognize the specific climate benefits of OGS, as existing methodologies for black carbon reductions focus on cookstoves rather than kerosene-powered lamps.

APA

Vulturius, G., & Tuhkanen, H. (2020). Matchmaking power: expanding climate finance for off-grid solar electricity. Stockholm Environment Institute. https://www.sei.org/wp-content/uploads/2020/04/sei-db-off-grid-solar-vulturius-2020.pdf

Chicago

Vulturius, Gregor, and Heidi Tuhkanen. Matchmaking power: expanding climate finance for off-grid solar electricity. Stockholm Environment Institute, 2020. https://www.sei.org/wp-content/uploads/2020/04/sei-db-off-grid-solar-vulturius-2020.pdf.

Wikipedia

{{cite report |last1=Vulturius |first1=Gregor |last2=Tuhkanen |first2=Heidi |title=Matchmaking power: expanding climate finance for off-grid solar electricity |publisher=Stockholm Environment Institute |date=April 2020 |url=https://www.sei.org/wp-content/uploads/2020/04/sei-db-off-grid-solar-vulturius-2020.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{vulturius2020matchmaking, author = {Vulturius, Gregor and Tuhkanen, Heidi}, title = {{Matchmaking power: expanding climate finance for off-grid solar electricity}}, institution = {Stockholm Environment Institute}, year = {2020}, month = apr, url = {https://www.sei.org/wp-content/uploads/2020/04/sei-db-off-grid-solar-vulturius-2020.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }