Investing in renewable energy and clean technologies is essential for reducing carbon emissions and enhancing energy security. Ultimately, they can help safeguard Africa’s economic future by addressing the root causes of climate-related economic losses and contributing to a more sustainable and prosperous continent.
The African Development Bank Group (AfDB) has approved $10 million to the KawiSafi II Fund to support climate-focused startups serving vulnerable communities across Africa. Announced on August 12, the investment will be drawn from the Sustainable Energy Fund for Africa (SEFA), a financing facility managed by the AfDB.
KawiSafi Ventures Managing Director Amar Inamdar described the investment as “catalytic,” noting that it would help the fund achieve its first close and attract further capital to support Africa’s climate innovators. “The African Development Bank’s investment into KawiSafi II, our innovative climate fund, is catalytic for helping us reach a first close and attract the significant private capital that is urgently required to support Africa’s climate innovators,” he said.
The $200 million KawiSafi II Fund targets energy transition, productivity, mobility, and logistics in sub-Saharan Africa and includes a $10 million facility for climate impact and ESG risk management.
The new fund follows KawiSafi Fund I, a $67 million off-grid energy fund launched in 2016 and backed by Acumen Fund. Fund I has invested in companies such as d.light, Bboxx, and BioLite. d.light recently secured a $176 million facility to scale its PayGo consumer finance offering in Kenya, Tanzania, and Uganda.
Projections from the "State and Trends in Adaptation Report 2023" by the Global Center on Adaptation estimate that climate change could cause a 2% to 4% annual loss in Africa’s GDP by 2040. This highlights the critical importance of the African Development Bank Group’s (AfDB) $10 million investment in the KawiSafi II Fund.
The investment aligns with the AfDB's broader goals of fostering sustainable development in Africa, demonstrating a commitment to addressing both immediate and long-term challenges through strategic financial support.
Hikmatu Bilali
