The 12th webinar organized under EELA, and the second since the launch of the new EELA program, focused on the financing models that can drive the implementation of energy efficiency opportunities across Africa.

During the webinar, several main financing approaches have been discussed by the speakers to support energy efficiency interventions in Africa. These include self-financing or guaranteed savings models, where energy users invest their own funds or secure loans and commit to achieving verified energy savings, and shared savings or energy performance contracts, which involve splitting the savings between the ESCO and the energy user while managing project risks and milestones.

On-bill financing was highlighted as a mechanism allowing repayment of investments through utility bills, providing high levels of guarantee for financiers. Energy-as-a-Service and Cooling-as-a-Service models were presented, in which ESCOs invest in equipment and charge users based on usage, often employing BTU sub-metering for accurate billing. Equipment leasing or lease-to-own models were also discussed, particularly for off-grid solutions like solar-powered refrigerators and lighting.

In addition, government-supported ESCOs, including Super ESCOs, play a key role in building capacity, facilitating projects, and extending financing to both public and private sector energy efficiency initiatives. Finally, bulk procurement and green on-wage financing were mentioned as broader strategies to reduce upfront costs, aggregate demand, and enable consumers to pay for sustainable energy products through salary deductions.

Key highlights and inputs from participants:

Ms. Elin Karlsson, EELA National Projects Coordinator, UNIDO - Welcome Remarks

Achieving net zero emissions by 2050 requires a transformative shift, with the industrial sector at the forefront. Energy efficiency, also known as the “first fuel” of a just and clean energy transition, offers some of the fastest and most cost-effective ways to cut CO₂ emissions, lower energy costs, and strengthen energy security. Guided by this vision, the EELA Programme promotes the widespread adoption of high-performing, affordable, and energy-efficient technologies across the continent. Yet, reaching Africa’s 2030 energy and climate goals will require over $200 billion in annual investment. That is why, with the extensive support of our partners and in collaboration with EACREEE, ECREEE, and SADCREEE, EELA works to foster investments and financing opportunities among stakeholders.

Mr. Canon Goddy Muhanguzi Muhumuza, Executive Director, EACREEE, represented by Yunus Alokore - Welcome Remarks

The East African Centre of Excellence for Renewable Energy and Efficiency (EACREEE) promotes renewable energy and energy efficiency across eight partner states through policy development, capacity building, awareness creation, research, and investment promotion. Achievements from the first EELA project phase include regional minimum energy performance standards for lighting and cooling, testing equipment for market surveillance, pilot business models like “lighting as a service,” an open-source e-learning platform, and work on a regional energy efficiency policy and compliance framework. The second EELA phase expands to more regions and adds national project windows, supported by SIDA and UNIDO.

Mr. Alaeldin Mohamed, Associate Industrial Development Expert, UNIDO

The Industry Clean-Tech Platform (ICTP) has been conceived as a catalyst to accelerate energy efficiency investments across Africa’s industrial sector. Designed to bridge the gap between industries, technology providers, and financiers, the ICTP will offer technical assistance to develop bankable project proposals, connect industries with suitable and affordable clean technologies, and mobilize innovative financing solutions to de-risk investments. Its integrated approach—combining capacity building, policy alignment, and access to cutting-edge tools—aims to turn energy efficiency opportunities into concrete industrial and economic benefits while fostering sustainable livelihoods.

Eng. Nickson Bukachi, Senior Policy Officer, AFREC

Energy efficiency is a low-hanging fruit that spans the energy triangle - equity, security, and sustainability - and unlike other supply solutions, it allows all three to be achieved simultaneously. A market assessment developed by AFREC in collaboration with United for Efficiency across the continent shows that ambitious energy efficiency targets could save up to 175 terawatt-hours by 2040, equivalent to 80 large 400 MW power plants. There is significant potential to improve energy productivity across key sectors, including industry, transport, agriculture, electricity, and buildings. The electricity supply system also presents major efficiency gains, as many utilities remain less efficient compared to other regions. Initiatives under consideration include regional integration and the development of an African single electricity market, distributed generation, distribution network optimization, the adoption of smart grids, and the establishment of regulatory targets.

Mr. Luc Kevo Tossou, Principal Energy Efficiency and Investment Officer, African Development Bank

The African Development Bank supports all 54 African member countries in promoting energy efficiency as a key strategic intervention for green energy and sustainable development. It provides technical assistance to make investments more attractive and facilitates private sector participation through sovereign and non-sovereign financing, including guarantees, loans, and lines of credit. To overcome high upfront costs and limited access to capital, the Bank also promotes several innovative financing models. Bulk procurement aggregates demand to lower technology prices, as demonstrated by India’s EESL programs. On-bill financing allows capital to be repaid through electricity bills, while green on-wage financing enables consumers to pay for sustainable energy products through salary deductions, expanding access to energy-efficient solutions.

Mr. Aref Abouzahr, CEO, Ark Energy

Arc Energy is an energy efficiency and energy management digitalization firm that provides technical, financial, and contractual advisory services for projects, acting as project manager and third-party auditor to verify energy savings. Leveraging advanced digital platforms and AI, Arc Energy automates data collection, cleansing, and analysis, enabling accurate measurement, reporting, and recommendations for energy conservation measures. Energy efficiency is defined as optimizing the operation of facilities—industrial, commercial, or institutional—to use less energy while improving comfort, indoor air quality, and operational efficiency, which also reduces CO₂ emissions. Key barriers to energy efficiency projects include limited funding, lack of expertise, and low awareness, which Arc Energy addresses through self-financing models and third-party financing. Practical models applied in the EELA project include shared savings, guaranteed savings, energy as a service, cooling as a service, and equipment leasing, often integrated with milestone-based funding and on-bill repayment mechanisms to ensure financial security and facilitate investment in energy-efficient retrofits.