- SEFA commits US$5.65 million alongside equal funding from Nordic Development Fund.
- New P REC aggregation model to channel hard currency into off grid renewable energy.
- Initiative targets 856000 people across 14 frontier markets
The African Development Bank Group (AfDB) has approved a US$5.65 million reimbursable grant through the Sustainable Energy Fund for Africa (SEFA) to pilot a new climate finance instrument aimed at accelerating off grid renewable energy deployment in fragile African states.
The funding will support the rollout of the Peace Renewable Energy Certificate aggregation facility, an innovative mechanism designed to use renewable energy certificates as a direct source of financing for mini grid projects. The initiative marks the first time such certificates will be deployed at scale as a funding tool in conflict affected and energy poor markets.
The facility is co financed by the Nordic Development Fund, which has committed an additional US$5.65 million, bringing total funding to US$11.3 million. Implementation will be led by Camco Clean Energy in partnership with Energy Peace Partners, the developer of the Peace Renewable Energy Certificate model.
Under the structure, the facility will sign long term agreements with mini grid developers across 14 countries including Nigeria, Ethiopia, Democratic Republic of the Congo and Somalia. Developers will receive upfront payments in exchange for the future rights to renewable energy certificates generated by their projects. These certificates will then be sold to multinational corporations seeking to align sustainability spending with high impact energy access outcomes.
By monetising future environmental attributes, the model is expected to unlock new hard currency revenue streams for developers operating in markets where access to commercial finance remains severely constrained. This is particularly critical in fragile and conflict affected regions where traditional project financing structures are often not viable.
The programme is expected to deliver electricity access to approximately 856000 people through around 240000 new connections, with close to 50% of beneficiaries being women. In addition, the facility aims to support the deployment of 71 MW of new renewable energy capacity across the targeted countries.
The initiative aligns with Mission 300, a joint programme between the African Development Bank Group and the World Bank to connect 300 million people in Africa to electricity by 2030. The Nordic Development Fund is also contributing to these targets through its renewable energy portfolio and participation in development partner coordination efforts.
According to João Duarte Cunha, Manager of the Renewable Energy Funds Division at the African Development Bank, limited access to capital remains a key barrier to scaling rural electrification, particularly in fragile contexts. He noted that the pilot represents a market shaping approach to mobilise private sector investment and expand financing options for mini grid developers operating in high-risk environments.
Author: Bryan Groenendaal
