We advocate that a differentiated capital strategy is urgently needed, which will require a fundamental shift in how much funding is committed and how it is structured.
First, if SDG7 by 2030 is to be achieved, the total amount of funding and the share of grant funding must increase.
This shift is two-fold:
- Amount: As noted earlier, even achieving basic household access will require closing a projected $12 billion shortfall for off-grid. Without new funding, we will fall short, particularly in frontier and low-income markets where commercial capital is unlikely to step in.
- Mix: We recognise the reality presented by GOGLA: achieving SDG7 by 2030 will require grants or subsidies to account for ~50% of total funding. This is not ideological — it reflects the cost, demand, and risk in underserved markets. Without it, the hardest-to-reach segments will remain unelectrified, and SDG7 will not be achieved.
We recognise the constraints: aid budgets are tight, global priorities are competing, and long-term commitments are difficult to secure. But the international community has endorsed SDG7. Meeting it will require hard decisions and a renewed commitment to resource the goal accordingly.
Second, governments must take greater ownership of offgrid technologies and allocate funds accordingly.
We cannot close the access gap solely through donor finance and private efforts. Governments must embed offgrid technologies into national strategies, allocate domestic budgets accordingly, and partner constructively with private implementers. Without this, off-grid will remain a secondary priority — underfunded, fragmented, and misaligned with national objectives.
Third, the mix must be tailored to market maturity.
Not all markets are the same — and capital strategies must reflect that. A uniform approach wastes resources and limits effectiveness. Instead we need differentiated capital stacks for the level of access, affordability, and enabling environment of each market:
- Frontier Markets: These are the most challenging markets, with low access, limited geographic coverage, high macroeconomic & political risk, infrastructure gaps, and limited competition. Grants should constitute a large portion of the capital stack, backed by committed equity funders. In our experience, for example, in Mozambique – a 50/50 split between grant and equity proved effective, enabling us to reach over a million people in just three years.
- Emerging Markets: In these markets, access is moderate, coverage is expanding, there is growing commercial capital and competition, but affordability or inclusion gaps remain. RBFs play a significant role in accelerating deployment, with debt finance also playing a growing role.
- Peaked or Mature Markets: These are closing in on universal access and have near full-geographic coverage (e.g. Côte d’Ivoire). Here, grants should play a limited and highly targeted role. Essentially, grant funding shifts to a fine-tuning function — closing remaining last-mile gaps through measures like enduser subsidies and promoting PUE.
This tiered capital approach is not about deploying grants uniformly or unequally, but rather about ensuring that the structure of capital corresponds to the nature of the challenge. This is how we achieve scale: not by choosing between grant and commercial finance, but by combining them — strategically, with market maturity in mind.
Excerpt of: Maximising Impact: Transforming Grant Funding for Energy Access (ENGIE Energy Access 2025)