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The Sustainable Energy Fund for Africa (SEFA) recorded a new milestone at the Africa Investment Forum 2024, with the announcement of Japan as its newest contributor, expanding the Fund’s donor base to 11 and strengthening its capacity to support crucial energy projects.
The announcement was made at a thematic boardroom session showcasing innovative funding structures to accelerate Africa's energy transition. The session also saw the launch of the "Understanding Power Project Financing Handbook," a crucial resource for unpacking the complexities of power project financing and understanding emerging project structures and financial solutions.
The handbook, a collaborative effort between the U.S. Department of Commerce's Commercial Law Development Program (CLDP), Power Africa (https://apo-opa.co/3ZMnqhj), the African Legal Support Facility (ALSF) (https://apo-opa.co/4izIZcD), and SEFA, offers practical insights into various financing structures, risk mitigation strategies, and methods for attracting climate-focused investors.
“For Africa’s incredible energy resources to be put to work to drive broad-based economic growth that will benefit people across the continent, we have to link investors and developers with opportunities that are as bankable as shovel-ready as possible. Today’s session demonstrated how we do just that through our collaboration with the Department of Commerce, the African Legal Support Facility, and the African Development Bank.” Richard Nelson, Power Africa Coordinator.
We are combining commercial and patient capital to bridge funding gaps, de-risk investments, and attract private capital into carbon pre-finance projects
The boardroom session featured two panels moderated by Dr. Daniel Schroth, Director of Renewable Energy and Energy Efficiency at the African Development Bank. The first one, “Scaling Up Blended Finance for Africa's Energy Transition,” explored the evolving landscape of power project financing in Africa and the transformative role of blended finance. Discussions focused on key sector shifts over the past decade, the impact of blended finance on project bankability, and the innovative approaches detailed in the newly launched handbook.
The second panel, “Investment-Ready Opportunities from SEFA's Pipeline,” showcased a selection of investment-ready projects from SEFA's pipeline, highlighting projects across diverse sectors and geographies that demonstrate the effectiveness of SEFA's blended finance model. These projects represent significant development impact and commercial potential. Featured projects included the ARM-Harith Successor Infrastructure Equity Fund targeting Nigeria and West Africa, the Moyi Power Metro-Grids project (https://apo-opa.co/41vaXjx) in the Democratic Republic of Congo, and BURN Clean Cooking Solutions in Kenya. The inclusion of the Moyi project was particularly significant, coinciding with the signing of a mandate letter between the African Development Bank and the Gridworks-led consortium during the AIF event.
Meredith Muthoni, Head of Electric Finance, BURN, noted: "Clean cooking is about more than energy—it’s about transforming lives, protecting health, and preserving the environment. Through our partnership with the SEFA Fund on a blended finance facility, we are combining commercial and patient capital to bridge funding gaps, de-risk investments, and attract private capital into carbon pre-finance projects. This approach enables us to scale affordable, electric cooking solutions for underserved households in Africa, driving lasting impact and advancing the clean energy transition.”
The success of projects like Moyi and the broader SEFA portfolio also underscores the importance of innovative financial mechanisms in achieving the ambitious goals of Mission 300 (https://apo-opa.co/4iyhj7G) – a joint African Development Bank and World Bank initiative aiming to provide electricity access to 300 million Africans by 2030
In his remarks, Dr. Kevin Kariuki, the African Development Bank’s Vice-President Power, Energy, Climate Change and Green Growth, said: "The energy access gap in Africa demands innovative financing solutions at scale. SEFA, now strengthened by the addition of Japan to its donor base, is uniquely positioned to address this challenge and unlock the transformative potential of clean energy for millions of Africans. Mission 300 is a testament to our commitment to achieving universal access to electricity."
The event concluded with a call to action for increased collaboration and investment to support Africa's energy transition.
Distributed by APO Group on behalf of African Development Bank Group (AfDB).
