The International Finance Corporation plans to invest up to US$40 million in a pan-African clean energy fund aimed at expanding access to decentralised renewable power systems across the continent.
The investment will be made in the Facility for Energy Inclusion (FEI), which is managed by Cygnum Capital, according to a statement released on Sunday.
The IFC said the equity investment could help increase the fund’s assets under management to around US$750 million as demand for renewable energy financing continues to grow across Africa.
FEI focuses on financing decentralised clean energy projects, including solar home systems, mini-grids and small- to medium-sized independent power producers.
The fund also supports energy solutions for telecommunications companies and commercial and industrial users, sectors where reliable electricity supply remains a major challenge in many African countries.
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The planned investment comes amid increasing efforts by development finance institutions and private investors to expand electricity access in regions where national grid infrastructure remains limited or unreliable.
According to the World Bank, hundreds of millions of people across sub-Saharan Africa still lack access to electricity, particularly in rural areas where extending traditional power grids is often costly and slow.
Cygnum Capital said the transaction reflected growing international support for scalable private-sector financing models aimed at accelerating the energy transition on the continent.
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“This investment demonstrates the continued efforts of multilateral and development finance institutions to expand access to decentralized energy systems in markets where grid infrastructure remains limited,” the company said in its statement.
Several development finance institutions already back the FEI platform, including the African Development Bank, Germany’s Kreditanstalt für Wiederaufbau (KfW), Norfund and the European Commission.
The fund was established to address a financing gap commonly known in the industry as the “missing middle.”
Many decentralised renewable energy projects in Africa are considered too small or complex to attract financing from large international lenders, while local commercial banks often view the sector as too risky because of limited operating history and currency volatility.
FEI said its debt-financing platform was specifically designed to support these mid-sized projects through more flexible financing structures.
The fund has increased activity in the decentralised energy sector in recent months.
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In December 2025, FEI provided US$7.5 million in financing to Odyssey Energy Solutions to support solar mini-grids and equipment for developers operating across sub-Saharan Africa.
Earlier this year, FEI also secured 50 million euros in financing from DEG.
Development finance institutions have increasingly prioritised renewable energy investment in Africa as governments seek to balance rising electricity demand with climate commitments and energy security concerns.
Analysts say decentralised renewable systems such as solar mini-grids and standalone home systems are expected to play a growing role in expanding electricity access, particularly in remote and underserved communities where grid expansion remains economically difficult.
