The statistics of energy access and availability on the African continent is worrying, perhaps even alarming, and definitely a cause for continent-wide concern. Only seven countries in Africa have energy access rates of up to 50 percent (the lowest among emerging markets across the world), and Nigeria, the much peddled big brother of the continent is not one of them.

The rest of the region has an average grid access rate of about 20 percent, and even when there is access, there is never enough to go round. This means that on the average, about 625 million people in Africa do not have access to energy. There is an increase in investments coming into Africa, and the infrastructure deficit, especially in the area of energy, is crippling these investment opportunities. Certainly, the continent is in a dire energy crisis that it needs to fix, and it does have the energy resources it needs to fix it.

While the quest for an energy-rich Africa is at the front-burner of the discourse on economic development, there is side-by-side the global conversation on climate change, sustainability and clean energy; a constant reminder of the continent’s commitments to international treaties and various regional, and sub-regional agreements on environmental protection.

This means that Africa has to grapple with development while putting sustainability into consideration for every step of the journey. This has driven the move for cleaner energy forms like gas and renewable energy in recent times. Unlike fossil energy projects however, which (while having their own peculiar challenges) are a familiar terrain for investors, renewable energy (RE) projects do not spell certainty of any kind. Apart from the fact that they are expensive to undertake and there are very few bankable RE projects on the continent, the immediate metrics and mathematics for investing in fossils look better than that of an RE project.

Thus, accessing bank loans, project financing, syndicated loans, and equity for RE projects have proved a tad difficult. Yet seven of the ten most suitable countries for renewable energy potential are in Africa, so it is only a no-brainer that the continent should drive investment in that sector.

With the rising challenge of financing RE projects, there has been a foray into innovative and alternative means of financing for which Private Equity (PE), Venture Capital (VC) funding, Pension funds, Sovereign Wealth funds, and Green Bonds have been explored. An alternative financing method that has not been explored as much though, is crowdfunding. Crowdfunding is a financing method that uses the power of digital and mobile technology and the internet to pool resources from a large number of people, in varying amounts to fund projects. The routine thought that follows the mention of crowdfunding is a Gofundme or Kickstarter account entreating people to fund a charity project or a humanitarian cause. While this is part of what crowdfunding is, it is not all of it.

Crowdfunding in fact includes investing in projects and ventures, through pooling capital from various individuals while offering them return on investments (ROIs) either in form of equity or debt. In this form, it is usually referred to as investment crowdfunding.

The crowdfunding market, unsurprisingly, is doing pretty well around the globe, as most people are seeking new forms of investment outside traditional means; also because technology and the internet have disrupted a lot in the investment market, and finally, because projects are actively exploring new methods of funding that do not have the bottlenecks of bank loans and other traditional methods. In fact the global value of crowdfunding in 2015 stood at $34.4 billion, topping the global investments in VC funding in the same year which stood at $30 billion. Sadly though, Africa contributes only less than half of one percent to the global crowdfunding market.

Still, there are prospects for crowdfunding Africa’s power sector, especially with the rise of mini-grids and off-grid projects, Independent Electricity Distribution Networks (IEDNs) and the Renewable Energy Feed-in-Tariffs (REFITs).

Many African countries too, realising the benefits of privatisation, have tapped into it for their core industries including energy and this has enabled private players to get more involved in investment. The investment appetite for African projects by foreign investors also works for the continent in many ways. The global call to combat climate change is an enabling factor for tapping into the need for social good in crowdfunding RE projects. Crowdfunding in Africa has mostly been explored in Eastern Africa, and even that, has not been done on a large scale.

However, the results from that sub-region show that if explored in-depth by the continent, there are very favourable prospects. With crowdfunding, the need for sustainable and clean energy is met while simultaneously solving the problem of financing. Essentially, it will serve as a commingling of technology, finance, energy and social good, birthing a formidable solution for the continent. The Ubuntu and community spirit of Africa also sits well with this form of financing, as it piggy-backs on local involvement in finding solutions. Furthermore, with high interest rate and constrained access to credit in Africa, crowdfunding will provide a viable option for small off-grid projects requiring financing.

While it is appreciated that there are challenges to crowdfunding in Africa, especially with the continent’s legal regime, high level of technological illiteracy andlow level of confidence in online platforms and mobile technology, the possibilities are enormous. It is an area the region should explore to close its energy infrastructure gap, encourage investments and avoid the deleterious effect of carbon-intensive development.