THE African Development Bank (AfDB) has announced a significant investment to boost climate initiatives in sub-Saharan Africa. The Bank’s Board of Directors recently approved a $10 million junior equity investment in the KawiSafi II Fund, a venture capital fund designed to address gaps in energy transition, productivity, mobility, and logistics across the region.
The investment, which will be deployed through the Sustainable Energy Fund for Africa (SEFA), marks a strategic effort by the Bank to support local businesses that are creating and expanding climate-focused projects aimed at benefiting vulnerable communities. SEFA, managed by the African Development Bank, is a catalytic financing facility focused on advancing sustainable energy solutions in Africa.
KawiSafi II is a $200 million venture equity fund that builds on the success of its predecessor, KawiSafi Fund I. The original $67 million off-grid energy fund, established in 2016, was spearheaded by Acumen Fund, a prominent organisation with over two decades of experience in investing in companies that address global poverty challenges, including renewable energy. KawiSafi Fund I successfully supported companies like D.light, Bboxx, and BioLite, which have made significant strides in the renewable energy sector.
Amar Inamdar, Managing Director of KawiSafi Ventures, emphasised the importance of the African Development Bank’s investment, stating, ‘The Bank’s catalytic commitment will leverage investments into breakthrough African start-ups addressing climate change through renewable energy, clean mobility, and other key sectors crucial to achieving our climate goals.’
The KawiSafi II Fund includes a $10 million technical assistance facility aimed at maximizing climate impact and improving the management of environmental, social, and governance (ESG) risks. This initiative reflects the growing need for patient and risk-tolerant capital to support emerging African climate businesses as they strive to enter new markets, despite the current shortage of equity capital in the region.
João Duarte Cunha, Manager of the Bank Group’s Renewable Energy Funds Division, highlighted the importance of the investment, noting, ‘The KawiSafi Fund II presents an opportunity to provide much-needed venture and growth capital to emerging businesses linked to energy access and energy transition, at a time when such capital is most needed in the market.’
This investment by the African Development Bank through SEFA demonstrates its ongoing commitment to promoting a just energy transition and combating climate change. By partnering with the private sector and investing in innovative solutions, the Bank aims to drive sustainable development and economic growth across Africa.
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