There is a persistent assumption in development finance circles that emerging markets are homogeneously capital-starved. The on-the-ground reality is considerably more nuanced. In parts of Southeast Asia: Vietnam, Thailand, Indonesia: domestic banking systems are liquid, local-currency borrowing is accessible to established developers, and international private credit entering these markets competes directly with banks that have first-mover advantage and lower transactional friction. Africa tells a different story. With limited exceptions, domestic capital markets remain thin, commercial bank appetite for infrastructure is constrained by short-tenor balance sheets, and collateral norms are ill-suited to cash-flow-based assets. The result: a financing gap that is real, but unevenly distributed.
Nowhere is this gap more legible: or more addressable: than in the Commercial & Industrial (C&I) solar segment. Individual site installations typically involve capital expenditure of USD 500K to USD 5M: too large for microfinance, too small for institutional infrastructure funds, and too complex for commercial banks accustomed to collateral-heavy lending. This is the missing middle. And private credit, structured correctly, is its most natural solution.
The Aggregator Model: Africa’s Exportable Innovation
The structural answer to the ticket size problem, pioneered most systematically in Sub-Saharan Africa, is the platform aggregator model. Rather than financing individual rooftops, a private credit fund extends a revolving or term facility to a developer that aggregates dozens of C&I installations into a single portfolio. Security is taken not over physical assets: land, equipment: but over the contracted cash flows embedded in Power Purchase Agreements or equipment lease structures with commercial and industrial off-takers.
What makes this work on a scale is standardisation: uniform contract templates that reduce per-project legal cost; systematic off-taker credit scoring tools that enable underwriting at volume; and a cluster structure that houses multiple project SPVs efficiently under a single borrowing entity. The result is a USD 5–50M facility that is administratively manageable for the lender and transformative for the developer.
For Southeast Asia: where C&I markets in Indonesia, Vietnam, and the Philippines are maturing rapidly but aggregated lending infrastructure remains nascent: this architecture is directly transferable. The key adaptation is not structural but analytical: recalibrating credit methodology to reflect local off-taker profiles, regulatory risk, and currency dynamics.
Blended Finance Is Not Charity: It Is Architecture
Neither region unlocks institutional private credit at scale without blended finance. The risk-adjusted returns available, in isolation, are insufficient to attract commercial capital at competitive pricing without first-loss provision or credit enhancement. The structure that has emerged as best practice places DFI and impact capital in subordinated positions: typically, 35–45% of the capital stack: transforming a sub-investment-grade exposure into a bankable senior credit legible to investors with fiduciary constraints.
An underappreciated embedded risk is the refinancing cliff. Senior loan tenors of five years are routinely mismatched against underlying project contracts of 10–15 years. At maturity, the platform must refinance against a larger, more mature portfolio. If it has not scaled to the institutional take-out threshold: typically, USD 50M or above: a balloon payment risk materialises with limited resolution options. Step-in rights and portfolio sale mechanisms must be structured from the outset, not retrofitted at distress.
What Jakarta Can Teach Lagos: Regulatory Clarity and the Policy Dividend
The learning is not unidirectional. If Africa has the aggregation playbook, Southeast Asia offers something equally valuable: the policy dividend. In Vietnam and Thailand, C&I solar growth has been accelerated by structured regulatory frameworks: net metering schemes, corporate renewable energy tariffs, and grid-connection protocols that, while imperfect, provide lenders with enforceable project rights and predictable revenue streams.
African markets are catching up, but regulatory risk remains a material credit factor. Experience across the continent demonstrates that legal form: not commercial substance: often determines the difference between a bankable asset and an existential shutdown risk. Reframing energy supply contracts as equipment leases rather than power sales has resolved licensing exposure in multiple jurisdictions. It is effective. But it is a workaround, not a framework. The Southeast Asian experience of investing in regulatory engagement upstream: working with governments to create the policy conditions for scale is a model African C&I markets urgently need to replicate.
The Execution Gap: When Fundraising Outpaces Delivery
Across both regions, the most consequential: and least reported: risk in C&I solar credit is the divergence between financial momentum and physical delivery. Fundraising success is not a proxy for execution capacity. Platforms can raise capital rapidly against strong impact narratives and DFI co-investor credibility, while actual asset deployment: site acquisition, EPC contracting, grid connection, commissioning: lags materially behind the drawdown schedule.
Private credit lenders must therefore embed operational covenants that function as deployment guardrails: minimum MW commissioned per drawdown tranche, key person protections on core technical leadership, pipeline reporting obligations with 90-day forward visibility, and independent technical advisor reviews at regular intervals. These are not punitive: they are the covenant architecture that converts a promising platform into a bankable one.
A Shared Architecture, Differentiated Execution
The capital architecture for C&I solar private credit is converging globally. Blended finance de-risks the senior tranche. Aggregation solves the ticket size problem. Natural hedges and local-currency structuring address FX exposure. Regulatory engineering navigates licensing constraints. Operational covenants bridge the execution gap.
What differs between Lagos and Jakarta is not the toolkit: it is the sequencing, the emphasis, and the institutional relationships required to deploy it. The practitioners generating the best risk-adjusted returns in this space are those who have operated across both environments: who understand the structural mechanics deeply enough to adapt them, and who have the origination networks to access deals before they reach the broader market. Private credit in the energy transition is not a passive allocation. At its best, it is applied infrastructure intelligence: and the missing middle is where that intelligence earns its return.
Barka Sajou is Managing Partner, Ángeles Sostenibles, and an infrastructure investment professional with over 15 years of experience originating, structuring, and closing transactions across Africa and emerging markets. He has mobilised in excess of USD 1.5 billion across sovereign green bonds, private credit, and large-scale power assets. Views expressed are the author’s own.
