New Fund Launched to Address Africa’s Energy Crisis
As dusk fell over Cape Town, energy leaders convened against the backdrop of Africa’s ongoing power shortages. A coalition of global development agencies, philanthropic organizations, and private investors unveiled a $176 million fund—Zafiri—intended to provide electricity to households, energize businesses, and unlock economic opportunities for millions in sub-Saharan Africa.
Zafiri Aims to Close Energy Access Gap
The establishment of Zafiri signifies a pivotal moment in the continent’s efforts to bridge the energy access divide. This fund is poised to supply long-term equity financing to distributed renewable energy enterprises located in areas underserved by conventional electricity grids, directly addressing a critical challenge in Africa’s off-grid energy sector.
Partnerships Key to Investment
Managed by Inspired Evolution, a prominent African climate investment firm, Zafiri aims to overcome the prevalent scarcity of patient, long-term capital which is essential for expanding operations and attracting further investments. The fund’s founding shareholders include reputable institutions such as the International Finance Corporation (IFC), the African Development Bank Group, and the Rockefeller Foundation, alongside other influential development and financial organizations.
Addressing Energy Poverty
This initiative emerges at a time when African nations and development partners are intensifying their efforts in combatting energy poverty. Currently, over 600 million people in Africa lack access to electricity, rendering the continent the most energy-deprived globally. Ethiopian Tafala, IFC’s vice president for Africa, emphasized that collaborative efforts like Zafiri could significantly impact Africa’s energy issues.
Expanding Clean Energy Accessibility
Tafala remarked that providing millions of Africans with dependable electricity will necessitate considerable long-term investments. Zafiri exemplifies how allied partnerships can lead to transformative outcomes. By supporting decentralized renewable energy entities, this platform intends to facilitate electricity access for approximately 30 million individuals while fostering job creation and economic growth across the continent.
Supporting Mission 300 and Future Growth
Zafiri is positioned as the primary private financing mechanism in alignment with Mission 300, a joint initiative led by the World Bank and African Development Bank to connect 300 million people in sub-Saharan Africa to electricity by 2030. The fund will channel resources towards distributed renewable energy initiatives, including mini-grids and solar home systems, with at least half of its capital earmarked for these technologies.
Long-Term Vision for Investment
With a commercial launch of $176 million, Zafiri aims to achieve a final closing target of $300 million within the next year, with ambitions to scale up to $1 billion in the future. The African Development Bank has stated that the launch of this fund is a timely and strategic intervention, as distributed renewable energy is set to play a vital role in enhancing electricity availability across the continent.
Kevin Kariuki, the Vice President of Power, Energy, Climate and Green Growth at the African Development Bank, noted that solutions such as mini-grids and solar PV systems will account for a significant portion of new electricity connections in sub-Saharan Africa by 2030. The platform aims to provide renewable energy companies with the essential long-term equity financing required to meet their expansion objectives and further the goals of Mission 300.
Inspired Evolution views Zafiri as a pioneering model for mobilizing private and development capital to expedite Africa’s energy transition. Wayne Keast, Managing Partner at Inspired Evolution, highlighted the fund as a collaborative initiative that integrates the expertise of multilateral development agencies, financial institutions, philanthropic players, and private sector knowledge to deliver sustainable, affordable, and decentralized energy solutions across Africa.
