In 2023, Spark focused heavily on raising funds to scale the platform while steadily expanding our network of development partners and making our initial deployments into both energy efficiency and captive generation solutions.

With almost USD 10m raised in 2023 through the platform’s initial equity round and a further USD 15m committed in junior and senior debt, Spark ended the year with sufficient capital secured to turn our focus to increasing our DP base and ramping up deployment. At the time of writing, this funding is supporting our mission of helping more and more businesses to achieve their low-carbon growth plans.

However, this low carbon shift is having to take place in the context of continued economic headwinds. The combination of local currency devaluations, plus high inflation, borrowing costs and sovereign debt necessitates a selective approach to the allocation of Spark capital and a need to maintain discipline on pricing.

Fortunately, Spark benefits from having a diversified geographic footprint and a strong pipeline, particularly in East and Southern Africa, enabling us to be selective in the investments we make during 2024 and beyond.

Looking at the sector more broadly, there are several factors that point towards future growth and increased stability, which we expect will provide a supportive operating context for Spark. Sustainable energy production, for example, is increasingly cost competitive compared with grid and backup power options, Likewise, countries have all set Nationally Determined Contributions as part of the Paris Agreement that lay out their commitments towards climate mitigation and adaptation, with services like Spark’s likely to be in increased demand as countries work towards achieving those targets. In South Africa, the liberalising of the energy market is already providing a more supportive regulatory environment for distributed renewable energy deployment, with the government looking increasingly to the sector to help fix national grid reliability issues. In addition, the pressing need for job creation in the region aligns with national political priorities as well as our own impact goals.

Maintaining a strong pipeline of quality projects will remain a top priority for Spark, as will fundraising efforts.