The African Development Bank (AfDB) has approved a $40 million equity investment in Project Zafiri, a landmark initiative designed to accelerate the deployment of decentralized renewable energy (DRE) solutions across Africa. This investment marks a significant step toward closing the continent’s energy access gap, particularly in underserved and remote communities.
Project Zafiri is a collaborative effort spearheaded by the AfDB in partnership with the World Bank Group and other global development institutions. The initiative is specifically structured to address a persistent challenge in the renewable energy sector: the lack of patient, long-term equity capital needed to de-risk and scale DRE technologies such as mini-grids and stand-alone solar home systems.
Unlike traditional centralized power grids, DRE systems offer a faster, more flexible, and cost-effective way to bring electricity to communities that are often overlooked due to geographic, economic, or political constraints. These solutions are especially critical in fragile or off-grid regions where conventional infrastructure is difficult to deploy.
Project Zafiri is structured as a permanent capital vehicle with a long-term vision to raise $1 billion in total capital. The fundraising will occur in phases, with Phase 1 targeting $300 million in commitments. This initial phase is strategically split between junior and senior equity, with junior equity playing a catalytic role in attracting private sector investment into what is traditionally seen as a high-risk, undercapitalized market.
The AfDB’s $40 million commitment is divided into two components:
- $30 million in senior equity, drawn directly from the Bank’s balance sheet.
- $10 million in junior equity, provided through the Sustainable Energy Fund for Africa (SEFA)—a multi-donor special fund managed by the AfDB that supports renewable energy and energy efficiency projects across the continent.
By anchoring the fund with both senior and junior equity, the AfDB aims to de-risk investment opportunities and create a more attractive environment for private capital. This blended finance approach is expected to unlock significant co-investment from commercial players, enabling the scale-up of renewable energy solutions that are both climate-resilient and socially inclusive.
Project Zafiri represents a bold and innovative financing model that aligns with the AfDB’s broader goals of sustainable development, energy access, and climate action. It also reinforces the Bank’s leadership in mobilising capital for Africa’s green energy transition.
