Africa's Clean Energy Fund Targets $2.5 Billion Surge Amid Project Approval Dip
The African Development Bank's flagship clean energy initiative, the Sustainable Energy Fund for Africa (SEFA), has announced ambitious plans to more than double its financing to $2.5 billion over the next two years. This significant expansion comes as momentum builds behind Africa's energy transition, despite a slight decrease in the number of renewable energy projects approved last year.
Renewed Investor Confidence Drives Funding Growth
Contributions to SEFA rose substantially in 2025, reaching $88 million compared to $54.3 million the previous year. This increase signals renewed investor confidence in African renewables, with European Union member countries providing the majority of funding. Since its inception, the fund has successfully mobilized approximately $1 billion in commercial capital alongside its own commitments.
"Based on our projects pipeline, we projected capital mobilization to climb to $2.5 billion," stated Joao Duarte Cunha, manager of the bank's Renewable Energy Funds Division and the Sustainable Energy Fund for Africa. "By 2030, we expect our portfolio to yield over $10 billion in commercial capital mobilized."
Project Approvals Show Strong Performance Despite Slight Dip
While the bank approved 13 renewable energy projects worth $97 million last year, compared to 14 projects valued at $108 million a year earlier, officials emphasize that the overall performance remains robust. "The last two years have been among our strongest, with 27 projects approved — also broadly comparable in funding volumes and significantly higher than earlier years," Cunha explained.
Kevin Kariuki, vice president for Power, Energy, Climate and Green Growth at the African Development Bank Group, noted: "SEFA is proving its catalytic value on the ground, with accelerated approvals and disbursements and growing impact."
International Support and Diverse Project Portfolio
Germany committed $40.1 million at last year's COP 30 global climate summit in Brazil to support SEFA's goal of universal energy access and its green hydrogen program. Italy announced a $5.9 million contribution to the fund. Backed by donors led by Denmark, SEFA has received cumulative contributions of $577 million since its establishment.
The fund provides low-cost loans and technical assistance to expand energy access and support sustainable development across the continent. In 2024, SEFA approved 14 renewable energy projects in Kenya, Nigeria, Burkina Faso, Ethiopia and Chad, adding about 840 megawatts of generating capacity and delivering 1.5 million new electricity connections.
Project Categories and Recent Initiatives
Of those 2024 projects:
- Eight were categorized as green baseload — producing the minimum amount of energy required to meet a country's energy demand
- Two were categorized as green mini-grids
- Four were energy efficiency initiatives
In 2025, most approved projects also fell under green baseload, with fewer mini-grid and energy efficiency operations. Recent initiatives include a $10 million loan to Hyphen Hydrogen Energy, a renewable energy firm producing hydrogen and ammonia in Namibia, and an $8.14 million guarantee for an Ivory Coast social currency bond to pay for 400,000 new electricity connections by year's end.
Expanding Beyond Traditional Energy Projects
Beyond utility-scale projects, SEFA is investing in decentralized energy platforms, including mini-grid developers and private equity and debt funds focused on distributed energy. "We are actively testing new product lines for clean cooking and for financing through commercial banks. There is real and meaningful innovation happening in this space," Cunha emphasized.
The fund remains committed to driving Africa's energy transition and achieving universal energy access by 2030. "Demand for catalytic financing and upstream support continues to grow, and we remain deeply committed to driving the energy transition and achieving universal energy access by 2030," Cunha concluded.
