Funding for clean energy projects in Africa rises even as the number of approved initiatives declines

African Clean Energy Fund Set to Expand Investment

The leading clean energy fund in Africa is preparing to significantly increase its financial support, aiming to reach $2.5 billion within the next two years as the continent accelerates its shift toward sustainable energy sources.

Investor interest in African renewable energy is on the rise, as demonstrated by increased contributions to the African Development Bank’s Sustainable Energy Fund for Africa (SEFA) last year. Since its inception, SEFA has attracted approximately $1 billion in private sector funding in addition to its own investments.

Joao Duarte Cunha, who manages the Renewable Energy Funds Division and SEFA at the African Development Bank, stated, “Our current project pipeline suggests we will mobilize up to $2.5 billion in capital.”

He further projected that by 2030, the fund’s activities could generate over $10 billion in commercial investment.

Rising Contributions and Project Approvals

SEFA’s funding reached $88 million in 2025, primarily from European Union nations, up from $54.3 million the previous year, according to the bank’s latest council meeting.

Kevin Kariuki, Vice President for Power, Energy, Climate, and Green Growth at the African Development Bank Group, commented, “SEFA’s impact is increasingly evident, with faster project approvals, greater disbursements, and expanding results on the ground.”

In the past year, the bank approved 13 renewable energy initiatives totaling $97 million, compared to 14 projects worth $108 million the year before.

“The last two years have been among our most productive, with 27 projects approved—matching previous funding levels and surpassing earlier years,” Cunha noted.

He added, “The need for catalytic funding and early-stage support is growing, and we are fully committed to advancing the energy transition and achieving universal access to electricity by 2030.”

International Support and SEFA’s Mission

At the COP 30 climate summit in Brazil last year, Germany pledged $40.1 million to help SEFA pursue universal energy access and develop its green hydrogen program. Italy also contributed $5.9 million to the fund.

SEFA’s purpose is to draw private investment into clean energy projects throughout Africa. Supported by donors led by Denmark, the fund has accumulated $577 million in total contributions. It offers affordable loans and technical support to broaden energy access and foster sustainable growth.

Recent Projects and Impact

In 2024, SEFA approved 14 renewable energy projects across Kenya, Nigeria, Burkina Faso, Ethiopia, and Chad. These projects are expected to add around 840 megawatts of new capacity and provide 1.5 million additional electricity connections. Of these, eight were classified as green baseload projects, ensuring a steady minimum supply of energy. Two were green mini-grid initiatives, while four focused on improving energy efficiency.

Looking Ahead: 2025 and Beyond

Most projects approved for 2025 also fall under the green baseload category, with fewer mini-grid and energy efficiency efforts. In December, SEFA granted a $10 million loan to Hyphen Hydrogen Energy, a Namibian company specializing in hydrogen and ammonia production. Additionally, SEFA provided an $8.14 million guarantee for a social currency bond in Ivory Coast, which will fund 400,000 new electricity connections by year’s end.

Beyond large-scale projects, SEFA is investing in decentralized energy solutions, supporting mini-grid developers as well as private equity and debt funds that focus on distributed energy generation from smaller sources.

“We are piloting innovative products for clean cooking and exploring financing through commercial banks. There is significant progress and creativity in this sector,” said Cunha.