KEY POINTS
- Zafiri launched at $176 million at the Africa Energy Forum in Cape Town on June 17.
- The fund targets a final close of $300 million within 12 months and $1 billion long-term.
- Zafiri will provide patient equity to mini-grids, solar home systems and clean cooking enterprises.
The Africa Energy Forum in Cape Town produced a headline announcement on June 17. A $176 million fund designed to reach people that traditional grids have never reached just launched.
Inspired Evolution, the Cape Town-based African climate investment firm, announced the commercial launch of Zafiri at the forum. The vehicle is a blended permanent-capital structure backed by some of the most significant development finance institutions in the world. Founding shareholders include IFC, the African Development Bank Group through its Sustainable Energy Fund for Africa, The Rockefeller Foundation, the Trade and Development Bank Group, the Nordic Development Fund, the MacArthur Foundation and South African bank FirstRand Limited.
FirstRand is the only commercial bank among the founding investors. CEO Mary Vilakazi described the vehicle as highly innovative and consistent with the group’s long-term strategy to partner with global development finance institutions to address Africa’s energy deficit.
Zafiri will deploy patient equity into distributed renewable energy companies and projects across sub-Saharan Africa. The target sectors are mini-grids, solar home systems, productive-use energy solutions and clean cooking enterprises. At least half of the platform’s capital is expected to flow into mini-grids, solar home systems and clean cooking.
What Zafiri is designed to do
The fund addresses one of sub-Saharan Africa’s most persistent financing problems. Distributed renewable energy companies, which serve communities beyond the reach of the main grid, have historically lacked access to the long-term equity they need to grow. Debt is available in some markets. Equity is not.
Zafiri sits inside Mission 300, a joint initiative co-led by the World Bank Group and the African Development Bank Group to expand electricity access to 300 million people in sub-Saharan Africa by 2030. Distributed renewable energy solutions, including mini-grids and stand-alone solar home systems, are projected to account for at least 50 percent of new electricity connections by 2030.
IFC Vice President for Africa Ethiopis Tafara said the fund converts ambition into connections. “By backing private sector distributed renewable energy companies, we are turning ambition into connections, powering homes, enterprises, and opportunity,” he said.
The path to $1 billion
The $176 million commercial launch is not the end of the story. Zafiri expects to reach a final close of $300 million within 12 months. The longer-term ambition is to scale the vehicle to $1 billion.
Wayne Keast, Managing Partner at Inspired Evolution, described the vehicle as core to providing long-term, patient, blended finance mechanisms to accelerate energy access for Africa’s underserved communities. The fund will operate across countries covered by Mission 300 compacts and will be managed by Inspired Evolution, which oversees more than $1.15 billion in clean energy investments across 21 African countries.
