AfDB-Backed $11.3m Facility to Unlock Mini-Grid Finance in Fragile Energy Markets

The African Development Bank Group has approved an $11.3 million initiative in the form of blended finance to support the acceleration of decentralised renewable energy deployment in some of the African continent’s most underserved and high-risk markets. As part of the approval, the Sustainable Energy Fund for Africa is set to contribute $5.65 million towards the initiative in the form of a reimbursable grant, with the Nordic Development Fund providing the same level of support.

At the centre of the initiative is the innovative structure, which utilises renewable energy certificates, named Peace Renewable Energy Certificates (P-RECs), as an advanced funding instrument for mini-grid developers. The initiative will address one of the biggest challenges facing rural electrification in fragile and conflict-affected states, the lack of early-stage capital.

The programme will be implemented through a partnership between Camco Clean Energy and Energy Peace Partners. The two will implement the P-REC Aggregation Facility in 14 frontier markets, namely Burundi, the Central African Republic, Chad, the Democratic Republic of Congo, Ethiopia, Liberia, Mali, Niger, Nigeria, Sierra Leone, Somalia, South Sudan, Sudan, and Uganda.

The framework will allow project developers to get upfront capital in exchange for future issuance of renewable energy certificates, which will in turn be procured by MNCs in exchange for their climate impact verification. This will, in essence, transform long-term value in carbon and clean energy into liquidity for infrastructure development.

From a systems perspective, the facility seeks to de-risk mini-grid investment in hard-to-finance markets by monetising environmental attributes upfront to improve bankability and reduce reliance on scarce concessional public funding.

The initiative is expected to deliver around 71 MW of renewable energy, connect approximately 240,000 households, and provide first-time electricity access to about 856,000 people, roughly half of whom are women. The initiative is also consistent with the ‘Mission 300’ initiative, a collaboration between the African Development Bank and the World Bank, which aims to bring 300 million Africans access to electricity by 2030.

According to João Duarte Cunha, Manager of the Renewable Energy Funds Division at SEFA, the structural issue is the lack of early-stage capital in rural electrification, especially in fragile contexts. He also stated that the facility is an attempt to support the testing of scalable market-based climate finance instruments with the potential to leverage private sector support for mini-grids, as well as direct support to the broader continental access objectives.

Camco Clean Energy described the Peace Renewable Energy Certificate Aggregation Facility as a means of unlocking additional non-dilutive capital for energy access projects that would otherwise face financing constraints. The organisation underscored the broader economic and social benefits of electrification, including job creation and improved living standards in underserved communities.

Energy Peace Partners highlighted that renewable energy in fragile contexts delivers broad development gains in health, education, and stability, and sees the facility as a way to convert corporate sustainability commitments into upfront capital for developers in high-risk markets.
Overall, the initiative reflects a growing shift in energy access finance: from traditional grant and debt structures towards blended, market-linked instruments designed to unlock private capital at scale in environments where conventional models have proven insufficient.