Written By: Faith Jemosop
On 19 July 2025, the African Development Bank (AfDB) Board approved a $40 million equity investment in Project Zafiri, a new capital platform under Mission 300, aimed at expanding decentralized renewable energy (DRE) across underserved African communities.
Of that, $30 million comes from AfDB’s own balance sheet (senior equity), and $10 million is provided as junior equity by the Sustainable Energy Fund for Africa (SEFA), a multi‑donor catalytic finance facility managed by the Bank.
Zafiri is structured as a permanent capital vehicle targeting an eventual $1 billion capitalization, with a Phase 1 target of $300 million, split equally between junior and senior tranches to attract private investors into higher‑risk DRE markets.
Most important background
- Why Zafiri matters:
DRE technologies, mini‑grids, solar home systems, battery storage, are the fastest, most cost-effective mechanisms to bring electricity to remote and rural regions of Africa, especially where traditional grid extension is slow or cost‑prohibitive.
With only five years remaining to meet the Mission 300 goal of connecting 300 million people by 2030, this platform is a critical instrument for mobilizing long‑term equity capital and bridging financing gaps in the DRE sector.
- About SEFA:
SEFA is a multi‑donor concessional finance facility housed within AfDB, providing technical assistance grants and junior equity financing to private and public sector energy projects to catalyze commercial investment.
For example, SEFA offers grants and blended financing to derisk projects and build investable pipelines, and it has previously supported major initiatives like the Africa Renewable Energy Fund and the Facility for Energy Inclusion (FEI).
- Strategic alignment:
Zafiri supports multiple AfDB strategic priorities: expanding Light Up and Power Africa, Industrializing Africa, and improving the quality of life, all core elements of AfDB’s 2024–2033 Ten‑Year Strategy.
It is also directly linked to the New Deal on Energy for Africa, SDG 7 (affordable and clean energy), and AfDB’s climate‑finance priorities under its Climate Change and Green Growth Policy.
A new phase in African climate finance
SEFA has in recent years made catalytic investments in climate‑tech innovation (e.g., $10M into Persistent’s ACV Fund), in energy inclusion funds like KawiSafi II, and drawn major donor support from Germany, US, UK, Japan, France, Denmark, Spain, Italy, Norway and others.
In 2024, SEFA approved a record $108 million across 14 energy projects and now manages a portfolio of over $300 million expected to unlock up to $15 billion in private investment, generating millions of new electricity connections across the continent.
Filling a financing gap in DRE
The African DRE sector has long been constrained by a lack of patient, long‑term equity capital. Zafiri anchors that gap as the largest patient capital commitment to the African DRE market to date.
By providing junior equity through SEFA, the platform also serves as a blended‑finance catalyst, helping to crowd in larger private‑sector equity into higher‑risk deployments.
Mission 300 and broader impact
Launched by AfDB and the World Bank Group, Mission 300 seeks to connect 300 million additional Africans to electricity by 2030. Backed by AfDB, IFC, the Rockefeller Foundation (which committed ~$10‑15 M into Zafiri), and other partners, the initiative elevates distributed renewable energy as a central strategy.
DRE is expected to account for more than half of all new electricity connections by 2030, a forecast rooted in rapidly declining solar/storage costs and scalable deployment efficiency.
Supporting data and testimonials
AfDB Vice President Kevin Kariuki stated that Zafiri is “a catalytic platform… integral to the Bank’s strategy to accelerate universal access to modern energy in Africa” and emphasizes the urgency with only five years left to meet energy access goals.
SEFA’s Daniel Schroth described it as “exemplifying how structured blended financing can unlock commercial capital while delivering inclusive, climate‑resilient energy access.” The structure splits $300 million between junior and senior tranches, with junior equity anchoring private capital by mitigating risk and serving as proof of confidence.
Economic, social, and climate benefits
DRE solutions not only accelerate energy access, it improves healthcare, education, and livelihoods in rural areas, spurring inclusive development. It also helps create green jobs: recent estimates suggest the renewable transformation could create millions of jobs across Africa by 2030, particularly in solar energy and clean technologies.
Cleaner energy also means lower CO₂ emissions and alignment with global climate goals, and DRE requires less infrastructure investment and can deliver faster than extensions of centralized grids.
Financial innovation
Zafiri marks a milestone in blending public capital with private equity in Africa’s energy finance sector. SEFA’s junior equity acts as foundational “first-loss” capital, reducing risk for larger investors and unlocking follow-on financing.
The platform’s permanent capital structure allows long time horizons needed for investments in infrastructure and resilient energy systems.
Scalability and future potential
With Phase 1 targeting $300 million, the total vehicle is expected to reach $1 billion, making it one of the largest dedicated DRE equity platforms on the continent. This initiative sets the stage for replication across other sectors and geographies: decentralized renewable energy can be scaled rapidly across African geographies with modular technology.
Summary
| Key Point | Highlights |
| What | AfDB and SEFA commit $40 M into Project Zafiri, a blended equity platform to scale decentralized renewable energy in Africa |
| Why | Provides lagging, longer-term equity to derisk and scale DRE deployment in rural and underserved areas |
| How | $30 M from AfDB senior equity; $10 M junior equity from SEFA; part of a $300 M Phase 1 raising, targeting eventually $1 B |
| Alignment | Supports Mission 300, AfDB’s strategic goals, and SEFA’s mandate to catalyze clean energy investment |
| Impact | Accelerates energy access, supports climate and development goals, unlocks private-sector capital |
Also read: How Solar and Batteries Could Help Egypt Beat Its Blackouts
AfDB and SEFA’s equity into Zafiri is a catalytic moment in Africa’s energy transition, demonstrating how public capital can unlock large-scale private investment to deliver electricity access at speed. As the platform scales through its next funding phases, its impact will likely shape the broader DRE ecosystem, from developers and financiers to governments and local communities.
The success of Zafiri will be a key indicator of how effectively blended finance, long-term equity capital, and decentralized technologies can converge to deliver energy justice and climate resilience across the continent.
