Private sector jostles for investments as global partners commit over $50bn to Africa’s energy transformation
February 3, 2025306 views0 comments
- 30 African leaders pledge firm commitment to deal
Bamidele Famoofo
The private sector has declared its readiness to invest in transmission and distribution of power to over 300 million Africans at the recently concluded energy summit in Tanzania.
Major investors called for Africa’s energy transmission and distribution sector to be opened to private capital during the Africa Energy Summit in Dar es Salaam.
Addressing African leaders and senior officials from multilateral institutions, Patrick Pouyanné, CEO of TotalEnergies; Hussain Al Nowais, Chairman of UAE energy giant AMEA Power; Aminu Umar-Sadiq, CEO of Nigeria Sovereign Investment Authority (NSIA); and Makhtar Diop, Managing Director of the International Finance Corporation (IFC), expressed consensus: the private sector has a role to play in electricity transmission and distribution in Africa to allow greater investment and extend electricity to millions of Africans currently living without it.
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The sector has traditionally been reserved in many African countries for public enterprises, particularly transmission, and distribution, but a succession of top energy entreprises.
Speaking in a panel session titled The Role of Private Investment in Africa’s Energy Sector, Diop said, “The private sector is not yet as involved as it should be in financing the energy sector in Africa… The primary challenge is to engage it in financing electricity transmission in Africa, which is essential and critical.”
“When you build a renewable energy plant, you must then transport that electricity, and that is where the challenge lies,” stressed Patrick Pouyanné, lamenting that some energy projects are stalled on the continent due to a lack of transmission infrastructure.
“It is time for developers to start investing in the distribution network. Production is easy, but how do you evacuate that production? How can it be done with a weak network?” asked AMEA Power Chairman Hussain Al Nowais. He cited Morocco, Egypt, and South Africa as examples of successful energy sector reforms.
Present in 20 African countries, AMEA Power produces 600 megawatts on the continent, and its chairman stressed that currency convertibility is crucial to attracting more private investments to develop electricity in Africa.
Energy projects also require sovereign guarantees to be developed. “We need to have a guarantee instrument to develop projects. This has been discussed for years (with development finance institutions), but now it is time to act,” said Patrick Pouyanné, stressing that the potential exists to develop renewable energy, such as hydropower and solar, in Africa.
Also speaking at the event, Sahara Group, a leading international energy and infrastructure conglomerate with operations in over 42 countries across Africa and Middle East, said Africa needs to adopt collaborative policies, sustained multi-stakeholder investments, and bold reforms in the quest of addressing the continent’s low energy access.
Kola Adesina, Executive Director, Sahara Group has said the continent’s pressing energy challenges require immediate action involving African nations and international partners to adequately power underserved regions, promote renewable energy adoption, and improve energy efficiency across the continent.
“Sahara Group is delighted that heads of government and other critical stakeholders are keen on lighting up Africa by exploring creative ways of extending electricity to over 600 million Africans who currently lack access. The agreement to provide access to electricity for 300 million people in Africa by 2030 which was endorsed by the heads of government and key partners at the summit is a huge step for Africa. Sahara Group is committed to supporting the achievement of this laudable vision through working in collaboration with all stakeholders,” Adesina said.
According to Adesina, the task ahead calls for partnerships among governments, private sector stakeholders, development partners, and civil society organizations. He noted that in addition to securing funding, robust capacity building in energy infrastructure and technology would be required to deliver the initiative seamlessly.
“We are up against the all-important task of bridging the energy gap in Africa and need a strong coalition of stakeholders to achieve this. We will need bold policies and tariff reforms and an unwavering commitment to funding the infrastructure required to bring energy to life responsibly in Africa. Sahara Group has invested in this project, and we are already enhancing our power operations to deliver reliable, affordable, and sustainable energy solutions to improve energy access and economic growth,” he added.
Adesina said working through the Sahara Power Group, the energy conglomerate would continue to make “viable and sustainable” investments in Power Generation and Distribution assets across the continent.
“With about 2,000MW generation capacity, Sahara’s dedication to enhancing energy access is unwavering. In Nigeria, we are set to deliver a new 180MW Power Plant in Rivers State this year to boost power supply and drive industrialisation in Africa’s most populous nation. Sahara Power Group is also exploring investment opportunities in Hydro Generation Plants in East Africa to promote access to clean energy.”
Mission 300 partners pledged more than $50 billion in support of increasing energy access across Africa.
African Development Bank Group and the World Bank Group plan to allocate $48 billion in financing for Mission 300 through 2030, which may evolve to fit implementation needs. Agence Francaise de Development (AFD): €1 billion to support energy access in Africa, Asian Infrastructure Investment Bank (AIIB): $1 billion to $1.5 billion to support Mission 300, Islamic Development Bank (IsDB) Group: $2.65 billion in support of Mission 300 and energy access in Africa from 2025-2030, OPEC Fund: An initial commitment of $1 billion in support of Mission 300 with additional financing to follow.
World Bank Group and the African Development Bank Group: Launched Zafiri, an investment company that supports private sector-led solutions, such as renewable mini-grids and solar home systems. Zafiri anchor partners will invest up to $300 million in the first phase and mobilize up to $1 billion to address the persistent equity gap in Africa in these markets.
The Dar es Salaam Energy Declaration represents a key milestone in addressing the energy gap in Africa, where more than 600 million people currently live without electricity. The commitments in the Declaration are a critical piece of the Mission 300 initiative, which unites governments, development banks, partners, philanthropies, and the private sector to connect 300 million Africans to electricity by 2030. The Declaration will now be submitted to the African Union Summit in February for adoption.
By addressing the fundamental challenge of energy access, Mission 300 serves as the cornerstone of the jobs agenda for Africa’s growing youth population and the foundation for future development.
Twelve countries—Chad, Côte d’Ivoire, Democratic Republic of Congo, Liberia, Madagascar, Malawi, Mauritania, Niger, Nigeria, Senegal, Tanzania, and Zambia—presented detailed National Energy Compacts that set targets to scale up electricity access, increase the use of renewable energy and attract additional private capital. These country-specific plans are time-bound, rooted in data, endorsed at the highest level and focus on affordable power generation, expanding connections, and regional integration. They aim to boost utility efficiency, attract private investment, and expand clean cooking solutions. Deploying satellite and electronic mapping technologies, these compacts identify the most cost-effective solutions to bring electricity to underserved areas.
“Tanzania is honored to have hosted such a monumental summit to discuss how, as leaders, we will be able to deliver on our promise to our citizens to provide power and clean cooking solutions that will transform lives and economies,” said Samia Suluhu Hassan, President of the United Republic of Tanzania.
Implementing the National Energy Compacts will require political will, long-term vision and the full support from Mission 300 partners. Governments are paving the way through comprehensive reforms, complemented by increased concessional financing and strategic partnerships with philanthropies and development banks to catalyze increased private sector investment.
Akinwumi Adesina, President of the African Development Bank Group, emphasised the need for decisive action to accelerate electrification across the continent. “Critical reforms will be needed to expand the share of renewables, improve utility performance utilities, ensure transparency in licensing and power purchase agreements, and establish predictable tariff regimes that reflect production costs. Our collective effort is to support you, heads of state and government, in developing and implementing clear, country-led national energy compacts to deliver on your visions for electricity in your respective countries.”
“Access to electricity is a fundamental human right. Without it, countries and people cannot thrive,” said Ajay Banga, President of the World Bank Group. “Our mission to provide electricity to half of the 600 million people in Africa without access is a critical first step. To succeed, we must embrace a simple truth: no one can do it alone. Governments, businesses, philanthropies, and development banks each have a role—and only through collaboration can we achieve our goal.”
The firm commitments made by governments and partners at the summit demonstrate the unique power of the Mission 300 partnership. By combining government reforms, increased financing, and leveraging public-private partnerships, African countries are positioned to turn plans into action, delivering tangible benefits to millions of people.