Understanding the friction points
The session opened with a clear-eyed account of where the system is failing. Three structural frictions were identified as the core of the problem.
The first is the agriculture-energy disconnect. Energy companies working in the agri-energy space are routinely expected to manage entire agricultural value chains, including farmer education, input supply, market linkages and post-harvest support, on top of their core business. This is not a business model, it is a burden that breaks promising ventures before they have a chance to prove themselves.
The second is the capital stack mismatch. There is a well-documented gap between early-stage grants and large-scale DFI funding, with almost nothing in between to support the critical phase where companies are refining their business models and building toward scale. The result is a missing middle that swallows companies whole. The concentration of funding makes this worse: the vast majority of agri-energy investment has flowed to a handful of market leaders, leaving the broader ecosystem chronically underfunded.
The third is the burden of scale itself. High upfront capital costs, customer acquisition expenses and the near-total absence of consumer financing from local institutions create a wall that most companies simply cannot climb, regardless of how strong their underlying model is.
The measurement problem
One of the session’s most important contributions was a challenge to how the sector measures success. Public finance programmes have long defaulted to energy capacity as their central metric, counting kilowatts and battery charges as proxies for impact. But in the agri-energy context, these metrics tell you almost nothing about whether an intervention is actually working.
The shift being proposed is straightforward but significant: measure income generation, not energy output. A cold storage unit should be assessed by how much it keeps below the right temperature and what that means for farmer income, not by how much electricity it consumes. A solar irrigation pump should be evaluated by what it contributes to a farmer’s livelihood, not by its technical specifications. This reorientation, from technology performance to human outcome, changes what gets funded, what gets rewarded and what gets scaled.
The ‘’missing middle’’ and the graduation gap
The capital continuum in the agri-energy sector has a structural flaw at its centre. Companies that successfully complete pilot programmes routinely find themselves unable to access the capital they need to grow. The pathway from grants to patient capital to working capital to commercial investment is theoretically clear, but the infrastructure to walk companies along it does not exist in any coherent form.
The consequences are predictable. Companies stall. Promising models that worked at pilot scale never reach the farmers who need them most. And funders, having invested in early-stage support, see their investments fail to compound because there is nothing on the other side to catch the companies they have helped build.
Addressing this requires more than new financial instruments. It requires a deliberate effort to expand the investor pool beyond traditional impact investors, to build the ecosystem support that enables companies to graduate rather than stall and to create what might be called commercialisation grants, flexible capital specifically designed for the middle growth phase that results-based finance alone cannot serve.
Reframing the role of energy
A recurring theme across the session was the need to reframe how energy is positioned within agricultural systems. The dominant framing, in which energy companies seek to access agricultural markets, gets the relationship backwards. The more productive question is how agricultural food systems can integrate distributed renewable energy as a core service, with energy treated as a strategic input rather than an operational cost.
This reframing has practical implications. It changes who the natural partners are, opening the door to agricultural processors, exporters and aggregators who have a direct vested interest in farmers producing more and losing less. It changes how KPIs are set, aligning them with agricultural outcomes rather than energy metrics. And it changes how private capital is attracted, because investors in agricultural value chains understand the returns in ways that energy-focused investors often do not.
The case for local finance
The session heard compelling evidence that local commercial finance can work in the agri-energy sector, but only when the groundwork has been laid. The experience from Kenya’s EnDev programme illustrates what that groundwork looks like in practice: direct engagement with bank leadership to demonstrate how productive use energy assets generate income and reduce agricultural lending risk, followed by systematic capacity building for credit officers to assess those assets properly.
The results were significant. Thousands of MSMEs were financed, with the large majority taking loans for solar irrigation, milling or cooling. One farmer in Nyeri County saved the equivalent of hundreds of euros per season by switching from fossil fuel to solar irrigation, generating enough income to repay her loan and improve her household’s livelihood. The business case is there. The barrier is not appetite but knowledge, and that is a barrier that can be addressed.
The challenge is that even where de-risking mechanisms like guarantees exist, banks do not always have the right incentives to engage seriously with a sector they do not yet understand. There are always less risky opportunities available to them. Changing that requires not just de-risking instruments but sustained relationship-building between financial institutions and the companies and distributors operating in the sector.
Unlocking domestic capital
The session’s most ambitious argument concerned the scale of the opportunity that remains untapped. While billions flow through impact investment and development finance channels, the far larger pools of domestic capital, including pension funds and local banks, remain structurally blocked from the sector. The barriers are not about returns. They are about perceived risk, misaligned structures and a lack of familiarity with business models that are, in practice, performing well.
The mechanism proposed to bridge this gap is embedded finance: integrating financial services directly into agricultural ecosystems rather than offering them as standalone products. Companies operating on this model, where financing is embedded into the platform through which farmers access inputs, markets and services, are achieving repayment rates that challenge the sector’s assumptions about risk. One example from Uganda demonstrated near-perfect repayment across thousands of loans, with commercial capital generating returns that would attract any serious investor if the perceived risk were better understood.
The proposed pathway is a staged one. Philanthropic capital takes the first-loss position, de-risking embedded finance companies sufficiently for banks to lend. Those loans generate track record. That track record enables securitisation. And securitisation opens the door to pension funds and other long-term domestic capital that the sector has not yet been able to reach. Every dollar of philanthropic capital deployed as a de-risking facility can unlock multiples of commercial investment. The leverage effect is real, but it requires philanthropy to play its role deliberately rather than simply filling gaps.
What the sector needs to do
The session produced a clear set of priorities. Programmes need to shift their measurement frameworks from energy output to income generation. Support needs to be designed around consortia rather than individual companies, pooling resources for market linkages, agronomic support and input supply so that no single company is expected to manage the entire ecosystem alone. Commercialisation grants need to be created for mid-stage companies. Existing agricultural subsidies need to be redirected toward renewable energy integration where possible.
Strategic partners in agricultural value chains need to be identified and engaged. Credit officers at local banks need to be trained to assess renewable energy as an income-generating asset. Philanthropic capital needs to be deployed deliberately to de-risk domestic financial institutions. Embedded finance models need to be explored and supported as a scalable route to reaching smallholder farmers. And the sector needs a shared evidence base, built from commercial viability case studies, that shifts risk perception across the board.
Underpinning all of this is a need for common metrics that bridge agriculture and energy investor expectations. Until the sector speaks a shared language about what success looks like, coordination will remain harder than it needs to be.
Conclusion
The financing solutions exist. The business models are working. The entrepreneurs are there. What is needed now is coordinated action across donors, private capital, local banks and philanthropy to connect them at scale.
The barriers are real but they are not insurmountable. With the right instruments, the right incentives and the right coordination, the capital that exists can start flowing to the places it is needed most. The conversation in Vienna was a step in that direction. The work now is to make sure it does not stop there.
Organised by Acumen, REEEP, GOGLA, EnDev, GIZ, GEA, Ikea Foundation and Open Capital Advisors.
