AfDB Approves $5.65 Million Facility to Boost Africa's Off-Grid Power
The Board of Directors of the African Development Bank (AfDB) has approved a $5.65 million reimbursable grant to pilot a new climate finance instrument aimed at expanding off-grid renewable energy in Africa's most fragile and energy-poor countries. According to a statement issued on Wednesday, the initiative is expected to provide about 856,000 people with first-time access to reliable electricity across 14 countries, with roughly half of the beneficiaries being women. This will be achieved through about 240,000 new connections and the addition of 71 megawatts of renewable energy capacity.
Funding and Management Details
The funding, provided through the Sustainable Energy Fund for Africa (SEFA), will support the rollout of the Peace Renewable Energy Certificate (P-REC) Aggregation Facility, an initiative designed to deploy renewable energy certificates as a direct funding tool for mini-grid projects across underserved communities. Co-financed by the Nordic Development Fund with an equivalent of $5.65 million, the facility has a total value of $11.3 million. It will be managed by Camco Clean Energy in partnership with Energy Peace Partners, which developed the Peace Renewable Energy Certificate label, the banks said.
Project Implementation and Impact
The certificates will be generated exclusively from small-scale mini-grid projects in conflict-affected and energy-poor communities. They will be purchased voluntarily by multinational companies seeking to channel corporate sustainability spending into projects with measurable social and environmental impact. Under the arrangement, the facility will enter into long-term purchase agreements with mini-grid developers across 14 frontier countries, including Nigeria, Ethiopia, and Uganda. Developers will receive upfront payments in exchange for the rights to the certificates produced by their projects. The facility will then sell the certificates to global corporate buyers, returning hard currency to developers operating in markets with limited access to commercial financing.
Alignment with Broader Initiatives
According to the statement, the project aligns with Mission 300, a joint initiative of AfDB and the World Bank to connect 300 million Africans to electricity by 2030. The Nordic Development Fund is contributing to the initiative's targets through its renewable energy portfolio and participation in the Development Partner Coordination Group.
Statements from Key Officials
João Duarte Cunha of the AfDB said the lack of capital remains a major barrier to rural electrification, particularly in fragile and conflict-affected countries. He noted that the facility represents a new approach to climate finance. "I am proud that SEFA is backing this innovative, first-of-a-kind facility, testing a new climate finance product capable of unlocking new sources of commercial funding for private sector-led mini-grids. This is the kind of market-making needed to advance Mission 300 objectives," he said.
Managing Director of the Nordic Development Fund, Satu Santala, said countries facing fragile and conflict situations require urgent access to clean and reliable energy. Additionally, Sherwin Das of Energy Peace Partners said most people without electricity on the continent live in fragile and conflict-affected areas where renewable energy projects can deliver significant impact. He said the facility would help convert corporate climate commitments into upfront capital for developers.
