Africa: Africa’s Energy Future

A conversation on the role of African private capital in securing Africa’s energy future kicked off the first day of proceedings at the African Development Bank Group’s 2025 Annual Meetings in Abidjan, Côte d’Ivoire.

The event, titled “Leveraging African Capital for the Energy Transition Through Blended Finance” and moderated by Dr. Daniel Schroth, the Bank’s Director for Renewable Energy and Energy Efficiency, served as a platform to explore solutions for attracting more African capital to finance renewable energy infrastructure through blended and innovative finance mechanisms and strategic partnerships.

In his opening remarks, Dr. Kevin Kariuki, Vice President of Power, Energy, Climate Change, and Green Growth at the Bank, set the scene for a continent with abundant renewable energy potential but suffering from a significant energy access deficit and limited financial flows. He highlighted Mission 300 – an ambitious initiative by the World Bank and the African Development Bank to provide electricity access to 300 million Africans by 2030- and the role of the Bank’s Sustainable Energy Fund for Africa (SEFA) as a key delivery vehicle for boosting access across the continent.

João Duarte Cunha, Division Manager of Renewable Energy Funds at the Bank, presented a comprehensive overview of SEFA’s strategy to catalyze private investments in clean energy, highlighting its strong track record in capital deployment and showcasing a diverse portfolio of interventions, ranging from upstream support to direct investments in utility-scale to decentralized renewable energy.

Dr. Barbel Kofler, Parliamentary State Secretary to the Federal Minister for Economic Cooperation and Development and Governor of the Bank for Germany, commended the strong partnership with the African Development Bank on SEFA. He emphasized the need to deploy blended finance strategically to promote the best clean energy technologies in Africa.

Derek Chime, Chief Investment Officer at ARM-Harith, a pan-African infrastructure fund managers, emphasized the need to educate African investors on the risk and return proposition for different asset class, underscoring that first loss tranches are essential in providing more comfort to these investors, particularly in equity funds. He highlighted recent successes in mobilizing Nigerian pension funds to their successor fund on the back of a junior equity investment provided by SEFA.

Tshepidi Moremong, Chief Operating Officer of Africa 50, stated that African institutional investors should be first movers and demonstrate to global institutional investors that Africa is open for business. Moremong also highlighted their most recent initiative with the African Development Bank – the Alliance on Green Infrastructure for Africa, which entails a project development fund, blending philanthropic and development finance capital with a view to accelerating a bankable pipeline of projects for financing by institutional investors. She recognized the strong contribution of SEFA as a catalytic investor in a fund expected to take significant early-stage risks.

However, she added that blended finance is no panacea for overcoming all the hurdles African investors face.

Marlene Jennings, Executive Director of Arch Emerging Markets Partners, emphasized the importance of policy dialogue and ensuring that Governments undertake the necessary reforms to attract more climate-related investments. She noted that the market needs to demonstrate maturity through more success stories of projects being developed, constructed, and operated while generating healthy returns for its original investors.

Clemens Calice, Executive Director of Cygnum Capital, rounded up the discussion, noting that private capital mobilization is a continuous process and that interest is only possible on the back of strong performance. He underscored that, despite the attractiveness of clean infrastructure assets, the interest of African institutional investors is slow to materialize, given the limited understanding of this asset class and structural barriers, notably the inability to take a regional or continental approach and deploy capital across multiple jurisdictions.

The event also provided a platform to launch SEFA’s 2024 Annual Report, which documents its best year on record, with $108 million approved for 14 projects, underscoring the fund’s transformational role in the sector.