AfDB Commits $40M to Zafiri Platform to Scale Renewable Energy Across Africa

The African Development Bank (AfDB) has taken a bold step toward accelerating universal access to energy across the African continent with the approval of a $40 million equity investment in Project Zafiri, a pioneering financing platform designed to scale Decentralized Renewable Energy (DRE) systems in underserved communities. The investment marks a flagship commitment under the Bank’s Mission 300 initiative, which aims to connect an additional 300 million Africans to electricity by 2030.

Zafiri, jointly developed by AfDB, the World Bank Group, and other strategic partners, is designed to overcome one of the biggest obstacles facing Africa’s off-grid energy sector: the scarcity of long-term, patient equity capital. By creating a blended finance model that strategically deploys both junior and senior equity, Zafiri aims to de-risk private investment and unlock commercial capital for the continent’s most vulnerable and energy-deprived populations.

“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, AfDB’s Vice President for Power, Energy, Climate, and Green Growth.

Decentralized Renewable Energy: The Future of Electrification in Africa

DRE solutions—including mini-grids, solar home systems, and stand-alone renewables—are widely recognized as the most cost-effective, sustainable, and rapid means of delivering electricity to rural, remote, and fragile areas. Unlike traditional centralized grid expansion, which can be prohibitively expensive and slow, decentralized systems can be deployed modularly to match local needs and scaled over time.

Currently, more than half of new electricity connections in Africa by 2030 are expected to come from DRE. However, despite their potential, DRE companies remain undercapitalized and lack access to the kind of long-term equity financing that allows for sustainable growth and project execution.

Zafiri: A Groundbreaking Financing Architecture

Zafiri is structured as a Permanent Capital Vehicle (PCV), a flexible investment platform that allows for long-term capital recycling and reinvestment. The initiative is targeting $1 billion in total capitalization, with Phase 1 aiming to secure $300 million in commitments, split evenly between junior and senior equity.

AfDB’s $40 million contribution consists of:

• $30 million in senior equity from its own balance sheet

• $10 million in junior equity sourced from the Sustainable Energy Fund for Africa (SEFA), a multi-donor facility managed by the Bank

The junior equity component is particularly important as it will serve as a first-loss buffer, thereby reducing investment risk and attracting private sector capital into a traditionally high-risk, low-liquidity sector.

“Zafiri represents the largest patient capital commitment to the African DRE sector to date,” said Wale Shonibare, AfDB’s Director for Energy Financial Solutions. “It demonstrates how structured, blended finance can unlock private capital while delivering inclusive, climate-resilient energy solutions.”

Strategic Alignment with AfDB’s Broader Vision

Project Zafiri is fully aligned with multiple pillars of the African Development Bank’s long-term strategic agenda:

• Ten-Year Strategy (2024–2033): Promotes private investment in sustainable infrastructure

• High 5s Priorities: Contributes to Light Up and Power Africa, Industrialize Africa, and Improve Quality of Life for the People of Africa

• New Deal on Energy for Africa: Accelerates access to clean, affordable energy

• Climate Change and Green Growth Policy: Supports both mitigation and adaptation goals

• Private Sector Development Strategy (PSDS): Mobilizes equity capital for green investment

“By anchoring the junior equity tranche, SEFA is helping to crowd in private investment at scale,” said Daniel Schroth, AfDB’s Director for Renewable Energy and Energy Efficiency. “Zafiri directly addresses the lack of long-term equity that has stifled the growth of the DRE sector.”

Mobilizing Markets for Impact

Zafiri not only mobilizes resources but also serves as a market-building mechanism. By consolidating funding, de-risking early investments, and working alongside policymakers and project developers, the platform is poised to catalyze transformational change in the way energy is financed, distributed, and consumed across Africa.

The platform has already attracted interest from development partners and institutional investors seeking blended finance vehicles with scalable impact. By providing reliable, long-term funding, Zafiri is expected to stimulate a new wave of innovation, entrepreneurship, and clean energy deployment, with a focus on equity, inclusion, and resilience.

A Critical Step Toward Energy Justice

With less than five years remaining to achieve the ambitious targets of Mission 300, Zafiri comes at a pivotal moment. As energy demand surges across the continent and climate pressures mount, the platform offers a practical and scalable tool for delivering on Africa’s vision of universal energy access, driven by local solutions and global capital.