Africa’s financing of clean energy financing is increasing despite low project approvals
NAIROBI, Kenya (AP) – Africa’s leading clean energy fund plans to double its funding 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) increased last year, indicating renewed investor confidence in African renewables. Since its launch, the fund has raised approximately $1 billion in commercial capital and its commitments.
“Based on our project plan, we predicted that the financing will increase 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 generate more than $10 billion in accumulated trade revenue,” he said.
Contributions to SEFA increased to $88 million by 2025, most of which came from European Union member states. That’s up from $54.3 million a year ago, the regional lender said during its recent board meeting.
“SEFA is showing its value on the ground, with faster approvals and disbursements and increased impact,” said Kevin Kariuki, vice president of Power, Energy, Climate and Green Growth at the African Development Bank Group.
The bank approved 13 renewable energy projects last year worth $97 million, compared to 14 projects worth $108 million the year before.
“The last two years have been among our strongest, with 27 projects approved – also broadly comparable in funding volumes and much higher than previous years,” said Cunha.
“The need for 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 contributed $40.1 million to last year’s COP 30 climate conference in Brazil, to support SEFA’s global energy goal and its green hydrogen program. Italy announced a contribution of $5.9 million to the fund.
SEFA is designed to attract private investment in clean energy across the continent. Supported by donors led by Denmark, it received cumulative contributions of $577 million. The fund provides low-cost loans and technical assistance to increase access to energy and support sustainable development.
By 2024, SEFA approved 14 renewable energy projects in Kenya, Nigeria, Burkina Faso, Ethiopia and Chad, adding about 840 generation capacity and delivering 1.5 million new electricity connections. Of those projects, eight are classified as green baseload – producing the minimum amount of energy needed to meet the country’s energy needs. Two were classified as green mini-grids and four as energy saving systems.
