Cape Town-based investment firm Inspired Evolution has been appointed to manage Zafiri, a new investment vehicle with a $1bn target, designed to channel crucial equity funding into Africa’s decentralised renewable energy (DRE) sector.

The fund is a cornerstone of Mission 300, a high-profile joint initiative by the World Bank Group and the African Development Bank (AfDB) to connect 300 million people in Sub-Saharan Africa to electricity for the first time by 2030.

Zafiri, which will begin operations in early 2026, is backed by a powerful consortium of development finance institutions (DFIs) and philanthropic organisations. The founding partners include the International Finance Corporation (IFC), the AfDB, The Rockefeller Foundation, Trade and Development Bank Group (TDB Group), and the Nordic Development Fund (NDF).

Tackling the ‘Missing Middle’

For years, Africa’s off-grid energy sector — comprising mini-grid developers, solar home system (SHS) providers, and clean cooking companies — has faced a critical financing hurdle. While debt financing is often available for mature projects, early- and growth-stage companies have struggled to raise long-term, patient equity.

This “missing middle” of finance prevents startups from scaling their operations, refining business models, and absorbing the high upfront costs of building last-mile energy infrastructure.

Zafiri is structured as a permanent capital vehicle specifically to address this gap. Unlike a typical 10-year fund, its permanent structure allows it to provide the long-term, flexible equity that DRE companies need to grow sustainably.

“One of the key challenges slowing Africa’s energy transition is the lack of equity financing for distributed energy companies,” said Ethiopis Tafara, IFC Vice President for Africa. “Zafiri addresses this ‘missing middle’ by offering long-term equity to these providers, helping scale innovative business models.”

The fund is expected to facilitate new electricity connections and clean cooking access for more than 30 million people over its lifespan.

How Zafiri’s $1bn Blended Fund Works

Zafiri is starting with an initial capitalisation of $300m, targeted for 2026, and is expected to scale to $1bn.

Its power lies in its “blended finance” structure. It uses a base layer of concessional (or “junior”) equity from partners like the NDF and The Rockefeller Foundation. This capital is designed to absorb initial losses, thereby “de-risking” the vehicle for other investors.

This “cushion” makes the fund more attractive to commercial-minded investors and larger DFIs, like the IFC and AfDB, who contribute the “senior” equity. The ultimate goal is to prove the model’s commercial viability and mobilise larger pools of private institutional capital into the sector.

“Zafiri enables the speed and scale that is needed to meet the ambitious targets of Mission 300,” said Satu Santala, NDF Managing Director. “NDF’s junior capital is expected to catalyse significant commercial investments.”

The New Manager: Inspired Evolution

The appointment of Inspired Evolution as the fund manager is a significant move. The firm is not a newcomer; it is an Africa-focused climate investor founded in 2007.

Headquartered in Cape Town, Inspired Evolution has a deep track record on the continent, having financed over 10 GW of renewable energy generation and supported 29 companies across 18 countries. The firm currently manages over $850m (including co-investments) through its existing Evolution funds. Recently, through its Evolution III Fund, the firm invested $20 million in Cold Solutions East Africa Holdings (CSEAHL), a company that builds and operates temperature-controlled warehouses and logistics facilities across East Africa.

This experience was likely key to its selection by the DFI consortium.

“We are honored to partner with IFC, AfDB and global investors to manage Zafiri, a vehicle uniquely designed to close the equity financing gap for distributed energy solutions across Africa,” said Wayne Keast, Co-Founder and Managing Partner at Inspired Evolution.

Keast added that the firm will “focus on building and scaling high-impact businesses that can deliver clean, affordable and reliable energy.”