Sustainable Energy Fund for Africa

“Unlocking Africa’s clean energy potential for employment and economic growth”

Background

The Sustainable Energy Fund for Africa (SEFA) is a bilateral trust fund administered by the African Development Bank - anchored in a generous commitment of USD 57 million by the Government of Denmark - to support small and medium clean energy and energy efficiency projects in Africa. In many African countries, smaller clean energy projects are potentially viable from a commercial perspective but the initial development costs often prevent these from accessing necessary financing. SEFA provides advisory, grant resources for technical assistance and capacity-building, as well as investment capital, to both off-set preparation costs and crowd-in additional investment.

Description

The development objective of SEFA is to support sustainable private-sector led economic growth in African countries through the efficient utilization of presently untapped clean energy resources. SEFA has been designed to operate under two components to provide grants, seed/growth capital, and technical assistance.

  • Project Preparation Grants (Component I):

Component I provides grant resources and technical assistance to private project developers/promoters to finalize pre-investment activities for renewable energy and energy efficiency project with total capital investment needs in the range of USD 30 – 75 million. Resources will target development activities since origination up to financial closure.
SEFA is structured to respond to requests originated or championed by AfDB staff. All proposals received will be screened and pre-assessed against the basic eligibility criteria by the SEFA Secretariat, housed in the Energy, Environment and Climate Change Department (ONEC) of AfDB. In the case of external requests meeting the basic eligibility criteria and presenting a good pipeline opportunity, SEFA Secretariat will work with other departments with the view of identifying a champion to lead the internal review and approval of a proposal. Check the application conditions and then fill out the form.

  • Seed/Growth Capital (Component II):

Component II seeks to address the lack of access to start-up and growth capital for Small and Medium Enterprises,  as  well  as  the  low  managerial  and  technical  capability  of  small-scale entrepreneurs, by investing equity. It will mainly target  renewable energy  and  energy efficiency  projects  requiring  total  investments  of  USD  10  –  30  million range.  

The SEFA Secretariat is currently working with the Bank’s Private Sector department in developing an investment vehicle concept which will then be tendered out to interested fund managers, with preference to those with a strong track record in Africa and exposure to sustainable energy investments. Based on business plan and investment team credentials, the Bank will select a fund manager to create a new pan-Africa, renewable energy and energy efficiency-focused fund. SEFA will make a capital contribution of USD 35 million to this fund, alongside other co-investors into small and medium sustainable energy projects in Africa. SEFA’s contribution may include a portion dedicated to technical assistance activities to complement portfolio investments by the fund.

Technical Department and Task Manager:
João Duarte Cunha
Senior Economist
Energy Environment and Climate Change Dept


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