EBRD and EU Expand $80 Million Guarantee Scheme to Boost Climate Investment in Sub-Saharan Africa

The European Bank for Reconstruction and Development (EBRD) and the European Union have expanded an $80 million guarantee facility designed to unlock private investment for climate and energy projects across Sub-Saharan Africa.

Announced on 7 July, the extension of the European Fund for Sustainable Development Plus (EFSD+) High-Barrier (Hi-Bar) Guarantee marks the EBRD’s first operation in the region supported by an EU guarantee mechanism. The programme aims to accelerate investment in renewable energy, industrial decarbonisation and critical minerals value chains by reducing the financial risks that often deter commercial lenders and investors.

The initiative comes as African countries seek to mobilise significantly more capital for energy infrastructure, clean technologies and sustainable industrial development. While the region possesses abundant renewable energy resources and substantial reserves of critical minerals, investment remains constrained by financing challenges, regulatory uncertainty, and limited access to affordable long-term capital.

Unlike traditional lending programmes, the Hi-Bar facility operates as a risk-sharing mechanism, helping to improve the bankability of projects that may otherwise struggle to secure funding. The programme is expected to support sectors that are essential to both economic growth and the energy transition.

A key focus will be renewable energy and power infrastructure. Expanding electricity access, modernising grids and improving energy efficiency remain major priorities across Sub-Saharan Africa, where millions of people still lack reliable electricity and businesses face high energy costs and supply constraints.

The facility will also target carbon-intensive industries such as mining, manufacturing and mineral processing. These sectors require significant investment to adopt cleaner technologies and remain competitive as global markets increasingly prioritise lower-carbon production.

Critical minerals represent another strategic investment area. Africa holds significant deposits of minerals required for batteries, electric vehicles and renewable energy technologies. Strengthening local processing and value-addition capacity could help countries capture greater economic benefits from the global clean energy transition while supporting industrialisation and job creation.

The programme expansion coincides with the EBRD’s growing presence in Africa. The bank recently opened an office in Lagos, Nigeria, and plans to establish a presence in Dakar, Senegal, following both countries becoming shareholders and countries of operation in 2025.

For the energy sector, the EBRD-EU partnership highlights the growing role of blended finance in addressing Africa’s infrastructure and climate funding gaps. The success of the initiative will ultimately depend on its ability to convert guarantees into bankable projects, attract private capital and deliver measurable progress in energy access, industrial competitiveness and sustainable economic growth.