91% surge in venture debt among the 10 observations in navigating the F&I market

Op-ed into the key areas to keep in mind when venturing into Africa’s finance and investment market

Looking at the latest ESI Africa Finance & Investment Industry Insights volume for 2026, the African F&I sector has moved beyond simply funding projects, writes Nicolette Pombo-van Zyl in this op-ed.

The sector now involves navigating complex geopolitical shifts, forward-thinking regulatory changes, and new ways of structuring capital.

1. Resilience amid global volatility

The 2026 Middle East conflict highlights Africa’s vulnerability to energy-driven inflation and tighter financial conditions.

Still, the main takeaway is that long-term investment drivers for Africa, such as a growing, digitally savvy youth population and expanding cities (urban and peri-urban), remain strong. This shows that Africa’s core value goes beyond short-term geopolitical shocks.

2. The 2030 “capital hump”

South Africa faces a staggering funding gap of R3.6 trillion to R4.2 trillion to reach its 2050 Net Zero goals.

What stands out is that South Africa faces a key funding challenge between 2025 and 2030. Success will depend more on the country’s ability to carry out regulatory reforms than on the amount of global capital available.

3. The social imperative of tariffs

People often see electricity pricing as just a numbers issue, but it is much more complex. Tariff reform is about economics, and it involves social and engineering factors, balancing affordability with the grid’s financial health.

Don’t miss this information: 5 shifts reshaping electricity in South Africa

4. Redefining “success” in market reform

Many people think that opening up the energy market will quickly lower electricity bills. But the analysis in the volume points out that real success means slowing price increases, not necessarily causing prices to drop.

5. Smart revenue as a financial strategy

Upgrading utility systems is often viewed as just a technical challenge. But from the STS discussion, using Smart STS systems is really a financial strategy. It helps secure upfront revenue and reduces losses that hurt utility finances.

Then there’s this: How the Middle East conflict could shape investment in Africa

6. The rise of “patient capital”

As many venture capitalists shift their focus to AI, energy start-ups have struggled to find funding.

However, there is good news. A new group of investors offering “patient capital” is now supporting high-risk, long-term technologies like carbon removal and nuclear fusion. These now make up a third of all energy venture capital funding.

7. Avoiding “financial carbon leakage”

In the push to go green, we could unintentionally cause more harm. If finance focuses only on green projects, banks might sell high-emission assets to less-regulated groups, making their records look better while actual emissions stay the same.

That is why transition finance is just as important as green finance.

What about this? Financing Africa’s manufacturing is not what you thought it was

8. Carbon as a bankability tool

For a long time, carbon had no set value, but that is no longer the case. Carbon finance is now seen as an asset class that helps make borderline projects possible by giving them the extra income needed to reach financial close.

9. Africa’s hidden negotiating power

Stakeholders often see Africa as just a supplier in the global race for critical minerals. But experts now say African countries have more power than they realise. They can ask for infrastructure and technical support in return for providing mineral supply security.

10. The surge of venture debt

Looking at 2025 figures, the biggest change is a 91% jump in the value of venture debt deals. With equity markets still tight, this type of financing has become the main way for African startups to keep running and get through the current funding cycle.

Final thoughts

These insights point to a growing maturity in the sector. Through smarter revenue collection, more sustainable finance and the leveraging of minerals, Africa is becoming a strategic player in the global energy transition, not just reacting to change.

Cover photo:  xtrekx©123rf