Without power, talent stays idle, factories fall silent and opportunity slips away. Universal electricity in Africa would cost about 15 billion dollars a year, according to the International Energy Agency’s latest report on financing electricity access. In a world that spends more than a trillion annually on clean energy, it is a modest sum. Yet 600 million Africans, most of the global unelectrified, still lack the power to light their homes or run their businesses.
The human costs are severe. Reliance on kerosene and firewood causes more than 700,000 premature deaths each year from indoor air pollution. Women and girls bear the brunt, walking long distances to collect fuel and breathing smoke that damages their health. Clinics cannot refrigerate vaccines, schools lose teaching hours, and businesses see goods spoiled or machines stopped whenever power cuts strike.
The economic toll is equally severe. Factories cannot scale when assembly lines stall. Agribusiness loses value without cold-chain storage. Start-ups pay a premium to run on diesel instead of reliable grids. The digital divide deepens, cutting millions off from online education, finance and work. By 2035, one in five new workers worldwide will be African, but without electricity many will remain excluded from the very economies they are meant to transform.
Africa’s Investment Case
Beyond the access deficit lies one of the world’s most compelling investment cases. Africa holds 60 percent of the planet’s best solar resources, along with strong wind corridors, untapped hydropower and geothermal seams along the Rift Valley. Beneath its soil lie lithium, cobalt, graphite and platinum — the minerals that anchor global supply chains for batteries, electric vehicles and clean-energy technologies. Africa is not a passive recipient of the energy transition. It is a structural enabler.
Demographics magnify these assets. A young, rapidly urbanising population guarantees rising electricity demand for decades to come. Reliable power is not just about lighting homes. It is the foundation for industrial hubs, data centres, cold chains and local processing of minerals where most value is created. Energy is the lever that converts natural endowments into jobs, competitiveness and growth.
The continent stands at a fork in the road. If power systems scale, Africa can become a global energy engine and manufacturing base. If not, resources will remain stranded and the development gap will widen. The question is no longer whether Africa needs investment. The real question is why investors should move now.
Why Investors Should Act
Electrification in Africa is the world’s largest access gap and therefore the largest untapped market for electricity access. Achieving universal coverage by 2035 will require about 150 billion US dollars in cumulative investment, close to six times current annual commitment levels. Public finance alone cannot deliver this; private capital must step in.
For investors, the case is both financial and strategic. Africa’s resources translate directly into pipelines of bankable projects. Without electricity there is no digital economy, no competitive factories and no resilient food systems. Investing today offers early exposure to Africa’s consumer markets and industrial base.
Returns can be compelling. In segments such as mini-grids, independent power producers, storage and transmission, commercially viable projects often target equity returns in the mid-teens, with some reported in the 15 to 20 percent range. Outcomes vary by country and structure, but the direction is clear. These investments also align with ESG mandates, green bonds and Article 9 portfolios, combining financial performance with sustainability credentials.
Call to Action
Capital flows only where projects are bankable. Governments need to provide regulatory certainty, credible power-purchase agreements, transparent procurement, and tools to manage currency and payment risk. Without this foundation, finance will not scale.
Domestic institutions must also step forward. Sovereign wealth funds, pension funds, banks, and corporates are well placed to channel African capital into energy infrastructure. Their participation secures returns, strengthens local ownership, and signals confidence in the continent’s growth story.
Private investors, regional and global, bring scale, technology, and expertise. By financing mini-grids, independent power producers, storage, and transmission networks, they can accelerate the pace of electrification.
Development finance institutions complete the chain. Through guarantees, blended finance, and credit enhancement, they reduce risk and crowd in larger volumes of capital. Kenya’s geothermal expansion and Rwanda’s pay-as-you-go solar rollout show how the right policies, matched with risk-sharing instruments, unlock investment.
The pathway is clear: governments set the rules, national actors demonstrate commitment, investors bring scale, and DFIs de-risk the frontier. With this alignment, Africa can turn the world’s largest access gap into its most dynamic energy market — and a cornerstone of the global energy transition. For those who act now, the rewards will be economic, social, and strategic.
Sources
- African Pact. (2025). Africa’s critical minerals: From resources to industrial power. African Pact. https://africanpact.org/2025/10/02/africas-critical-minerals-from-resources-to-industrial-power/
- International Energy Agency. (2025). Financing electricity access in Africa (Executive summary and dataset). IEA. https://www.iea.org/reports/financing-electricity-access-in-africa
- National Institute for Health and Care Research (NIHR) Global Health Research Unit – CLEAN-Air Africa. (2023). Tackling the “silent killer” in the kitchen: Household air pollution in Africa. University of Liverpool. https://www.liverpool.ac.uk/research/research-themes/living-well/clean-air-africa/
- United Nations Sustainable Development Group. (2025). Decoding Africa’s energy journey: Three key numbers. UNSDG. https://unsdg.un.org/latest/stories/decoding-africa%E2%80%99s-energy-journey-three-key-numbers
- World Bank. (2024). Progress on basic energy access reverses for first time in a decade. World Bank. https://www.worldbank.org/en/news/press-release/2024/06/11/progress-on-basic-energy-access-reverses-for-first-time-in-a-decade
- World Economic Forum. (2022). Africa is leading the way in solar power potential. WEF. https://www.weforum.org/stories/2022/09/africa-solar-power-potential/
- World Health Organization. (2024). Household air pollution and health. WHO. https://www.who.int/news-room/fact-sheets/detail/household-air-pollution-and-health