Funding for Africa Clean Energy Financing Surges Despite Fewer Project Approvals

Mark Munyua, CP solar's technician, examines solar panels on the roof of a company in Nairobi, Kenya, Sept. 1, 2023. (AP Photo/Brian Inganga, File)

By ALLAN OLINGO

8:15 PM EST, March 4, 2026

NAIROBI, Kenya (AP) — Africa’s flagship clean energy fund plans to more than double its financing to $2.5 billion over the next two years, as momentum builds behind the continent’s energy transition.

Contributions to the African Development Bank’s Sustainable Energy Fund for Africa (SEFA) rose last year, signaling renewed investor confidence in African renewables. Since its launch, the fund has mobilized about $1 billion in commercial capital alongside its own commitments.

“Based on our projects pipeline, we projected capital mobilization to climb to $2.5 billion,” said 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,” he said.

The contributions to SEFA rose to $88 million in 2025, mostly from European Union member countries. That was up from $54.3 million the year before, the regional lender said during its recent governing council meeting.

The bank approved 13 renewable energy projects last year worth $97 million, compared with 14 projects valued at $108 million a year earlier.

“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,” said Cunha.

“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,” he said.

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.

SEFA is designed to attract private investment in clean energy across the continent. Backed by donors led Denmark, it has received cumulative contributions of $577 million. The fund provides low-cost loans and technical assistance to expand energy access and support sustainable development.

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. Of those 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 and four as energy efficiency initiatives.

In 2025, most approved projects also fell under green baseload, with fewer mini-grid and energy efficiency operations. In December, SEFA approved a $10 million loan to Hyphen Hydrogen Energy, a renewable energy firm producing hydrogen and ammonia in Namibia. It also provided $8.14 million guarantee for an Ivory Coast social currency bond to pay for 400,000 new electricity connections by the end of this year.

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, or production of electricity from small scale sources.

“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 said.