Blended finance platform aims to scale decentralized renewables and strengthen climate-resilient energy infrastructure. ESG BROADCAST shares key takeaways.
The African Development Bank (AfDB), together with the Sustainable Energy Fund for Africa (SEFA), has approved a $40 million equity investment in Project Zafiri—an innovative equity platform designed to drive private sector funding into decentralized renewable energy (DRE) solutions across Africa. The commitment includes $30 million in senior equity from AfDB’s balance sheet and $10 million in junior equity from SEFA, a multi-donor special fund administered by the Bank.
Structured as a Permanent Capital Vehicle, Zafiri aims to raise $1 billion through phased funding rounds, with an initial $300 million in commitments planned under Phase 1. The platform is a central mechanism under Mission 300, AfDB’s flagship strategy to connect 300 million Africans to electricity by 2030. DRE technologies—including mini-grids and solar home systems—are expected to account for over half of these new connections.
“Zafiri is a catalytic platform that will be an integral component of the Bank’s strategy to accelerate universal access to modern energy in Africa,” said Kevin Kariuki, Vice President for Power, Energy, Climate, and Green Growth at AfDB. “This initiative provides a timely and innovative solution to scale private capital for impact.”
DRE systems are particularly suited to rural, remote, and fragile communities where traditional grid expansion is costly and slow. However, the sector has long struggled to attract private capital due to perceived risks and lack of patient equity funding. Zafiri seeks to overcome these challenges through a blended finance approach, using junior equity tranches to de-risk investments and crowd in commercial participation.
“This is the largest patient capital commitment to the African DRE sector to date,” said Wale Shonibare, AfDB’s Director for Energy Financial Solutions. “Zafiri demonstrates how blended financing structures can unlock commercial capital for inclusive, climate-resilient development.”
The investment aligns with AfDB’s Ten-Year Strategy (2024–2033), the High 5s agenda (especially “Light Up and Power Africa” and “Improve the Quality of Life for the People of Africa”), and its Climate Change and Green Growth Policy. Zafiri also supports SEFA’s mission to catalyze equity flows for clean energy and builds on the Bank’s Private Sector Development Strategy.
Zafiri is expected to be a critical enabler in achieving both energy access and climate adaptation goals, while reinforcing Africa’s leadership in sustainable energy deployment. By targeting long-term equity gaps in the DRE sector, the platform represents a landmark in African blended finance innovation.
ESG BROADCAST will continue monitoring the updates related to this topic. Stay tuned to be updated on the related policy and pivotal regulatory shift.
