Achieving Africa’s energy- and climate-related goals by 2030 will require annual investments of over USD 200 billion through the end of this decade. This will be vital to meet the growing energy needs of a continent where the median age of the population is 20 years and average GDP per capita is just over one-fourth of the global average.

Our tracking of energy spending suggests that around USD 110 billion is set to be invested in energy across Africa in 2024, of which nearly USD 70 billion to fossil fuel supply and power, with the remainder going to a range of clean energy technologies. Spending trends vary widely across Africa, but neither the total amount nor the proportion spent on clean energy are enough to put the continent on track to reach its sustainable development goals. As they stand, energy investments are equivalent to only 1.2% of the region’s GDP and clean energy investments, while rising, account for just 2% of the global total.

Debt repayments, which have increased sharply in recent years, mean that many African governments have difficulty accessing the funds required for capital-intensive clean energy projects. Moreover, low sovereign debt ratings further limit access to outside investment – in 2023, only two countries, Botswana and Mauritius, held investment-grade ratings.

Of the clean energy investments that have recently been made, the majority are in renewable power generation. While these projects are vital to meet Africa’s rising electricity needs in a sustainable way, the prospects for further growth will be limited as long as the grid itself is not upgraded and expanded. With average line losses of 15%, inefficient grids and insufficient interconnections are already creating bottlenecks for new renewable energy projects in the region.

Energy access is among the top priorities in Africa, where 600 million people live without electricity and roughly 1 billion people lack access to clean cooking. Financing needs for energy access initiatives fall well short of the annual USD 25 billion that is required to achieve the 2030 objectives of full access to modern energy. Progress in this area will require concessional finance providers to mobilise grants for the most vulnerable households and support the creation of bankable projects. The provision of other derisking capital will also be critical to allow the private sector to take a more active role.

A high cost of capital is a major impediment to scaling up clean energy investments in Africa. Reducing country-wide and project-specific risks will require a major effort from national policymakers, based on clear strategies and ambitious NDCs, alongside significantly more international financial and technical support.