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Climate Tech in Africa 2026: Funding, Models and Carbon Rules

6 min read

Where climate tech funding in Africa went in 2025 and 2026, the business models that scale, how Kenya regulates carbon projects and how to start a company.

Climate tech startups in Africa raise money most easily when they sell something people already pay for every day, such as power, water or transport, and collect in small instalments. Several of the largest players, such as M-KOPA, started in Kenya. Funding swings sharply from year to year, so build a model that earns from customers first and treats carbon credits as a second income line.

I co-founded Hackhouse, a builders' hub in Nairobi. This guide covers where climate funding has gone, the business models that work, Kenya's carbon market rules and the steps to start. I checked every figure on 5 November 2026.

How much funding goes to climate tech in Africa?

2025 was a strong year. Partech counted US$550 million of equity for cleantech startups in Africa, up 186% on 2024, second only to fintech (Partech, 2025 report).

2026 has been weaker for energy. Africa: The Big Deal tracked US$187 million for energy startups from January to September 2026, down 74% from US$721 million a year earlier. Climate tech across all sectors still took 35% of funding, helped by e-mobility: logistics and transport raised US$780 million, much of it from the electric motorbike company Spiro (Africa: The Big Deal, October 2026).

For a founder, those swings mean you should not plan around a large equity round arriving on time. Debt, grants and customer revenue carry many climate businesses through the gaps.

Which climate tech business models work in Africa?

The companies that have reached scale share one pattern: the customer gets a physical product now and pays for it over time, often by mobile money.

  • Pay-as-you-go energy and devices. M-KOPA, started in Kenya, reported 10 million customers across Kenya, Uganda, Ghana, Nigeria and South Africa in July 2026, over US$2 billion in credit extended and more than 40,000 agents. Its range now includes smartphones and e-motorbikes (M-KOPA, July 2026). Sun King sells solar lanterns, home systems and inverters in Kenya, paid outright or in instalments, and says it has sold over 31 million solar products worldwide (Sun King Kenya).
  • Productive-use solar. Here the product helps the customer earn. SunCulture sells solar irrigation pumps in Kenya from KES 3,900 a month, on a deposit followed by 30 monthly payments (SunCulture).
  • Electric mobility. Kenya's statistics office data, reported by CleanTechnica, shows electric motorcycles made up 9.6% of new motorcycle sales from January to August 2025, up from 7.1% of registrations in 2024. Spiro sold 5,390 of them in that period (CleanTechnica, November 2025).
  • Clean cooking with carbon finance. Cookstove makers sell stoves and earn carbon credits for the emissions avoided. More on that below.

Our guide to sustainable business models for impact startups goes deeper on choosing a revenue model.

How do carbon credits work for a Kenyan startup?

If your product measurably cuts emissions, a certified carbon project can sell credits for those reductions. Buyers now favour high-integrity credits. In December 2025, Gold Standard labelled its first credits from clean cooking projects under the Integrity Council for the Voluntary Carbon Market's Core Carbon Principles. One of them was a Kenyan household cookstove project developed by Global Cookstoves, a joint venture of Key Carbon and BURN Manufacturing (Gold Standard, December 2025).

Kenya regulates carbon projects under the Climate Change (Carbon Markets) Regulations 2024, in force since 17 May 2024. According to Oraro & Company, the main steps are:

  1. Apply to the Designated National Authority (DNA) with a project idea and the application fee.
  2. If approved, submit a project concept note for review by a technical committee.
  3. Receive a letter of no objection, then prepare a project design document for the Cabinet Secretary's approval.
  4. Start implementation within 12 months of the letter of approval, and report costs, expected reductions and revenue to the DNA.

Projects on public or community land must share at least 40% of the previous year's aggregate earnings with the community if land-based, and at least 25% if not. Price that into your model from the start.

How do I start a climate tech company in Kenya?

  1. Pick a daily cost your customer already pays. Diesel for a pump, kerosene for light, charcoal for cooking, fuel for a boda boda. Your price should beat that cost.
  2. Design the payment plan before the product. Decide the deposit, the instalment and how you collect by M-Pesa. Test whether customers keep paying through a bad month.
  3. Plan for hardware costs. Stock, import duty, warranty repairs and field agents all need cash before revenue arrives.
  4. Measure emissions from your first unit. Good data now makes a carbon project possible later.
  5. Match your funding to your assets. Equity for the team and product, debt or asset finance for stock you sell on credit. Our guide to impact investing in Africa explains who funds what.

Key facts

  • Cleantech startups in Africa raised US$550 million of equity in 2025, up 186% (Partech).
  • Energy startups raised US$187 million from January to September 2026, down 74% on 2025 (Africa: The Big Deal).
  • M-KOPA reported 10 million customers in five markets in July 2026.
  • Electric motorcycles were 9.6% of new motorcycle sales in Kenya from January to August 2025.
  • Kenya's carbon market regulations took effect on 17 May 2024.
  • Land-based carbon projects on community land must share at least 40% of earnings with the community.

If you are building in this space, the Hackhouse Residency runs for 12 weeks with no equity taken, and our events bring founders and partners together in Nairobi.

Frequently asked questions

Is climate tech funding growing in Africa?

It grew strongly in 2025, when cleantech equity rose 186%. Energy funding fell 74% in the first nine months of 2026, while e-mobility drew large rounds. Expect big swings from year to year.

What is pay-as-you-go solar?

The customer pays a deposit, takes the product home and pays the rest in small instalments, usually by mobile money. Companies such as M-KOPA, Sun King and SunCulture use versions of this model in Kenya.

Can a startup sell carbon credits in Kenya?

Yes, if the project is approved under the Climate Change (Carbon Markets) Regulations 2024 and certified by a standard such as Gold Standard. The approval process runs through the Designated National Authority.

How much of carbon revenue goes to communities in Kenya?

For projects on public or community land, at least 40% of the previous year's aggregate earnings for land-based projects and at least 25% for other projects.

Sources

Go deeper with us. Join the Hackhouse community for conversations that go beyond the surface, where builders share the hard-won lessons that never make it into press releases.

InnovationStartupsAfricaImpactClimate TechHackhouseAfricanStartupsBuildAfricaClimateTechCarbonMarketsCleanEnergy

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