This article is part of a series produced in collaboration with the African Development Bank in light of its sixtieth anniversary.
Please visit our dedicated portal to read about the Bank’s history and its activities on the continent.
Africa faces an urgent need for investment in its power sector to achieve universal electricity access and sustain economic growth. According to a recent report, “Estimating Investment Needs for the Power Sector in Africa 2023-2030”, produced by the African Development Bank and other partners, approximately $454bn ($64bn annually) is required between now and 2030 to meet Sustainable Development Goal 7 of universal energy access and to drive economic development sustainably. Achieving this goal will require substantial expansion in generation capacity, particularly from renewable sources, as well as large-scale grid and off-grid infrastructure development.
Renewables will drive new energy infrastructure
The report points out that with 195 million new connections needed by 2030, Africa’s electrification challenge is steep. Although countries in North Africa are close to universal access, significant gaps remain in Central, Eastern, and Western Africa, where millions of rural households lack electricity. To bridge this gap, the report suggests that Africa must leverage a mix of grid expansions and off-grid solutions, including mini-grids and solar home systems. These off-grid options are essential, given the logistical and financial hurdles of connecting remote communities to the main grid.
Nearly 88% of the required new capacity should come from renewable sources, particularly solar and wind, due to their cost-effectiveness and environmental benefits. Northern Africa alone will need $143bn to expand its power infrastructure, with significant investment in solar, wind, and hydropower. This strategy aligns with Africa’s low-emissions pathway and leverages the continent’s abundant renewable resources. The report also underscores the economic advantages of cross-border electricity trade, which can enable countries to share resources, reduce costs, and enhance grid stability. Investment in regional interconnections, estimated at $24bn, will facilitate this integration.
Low-carbon and climate change scenarios could require additional funding
The report also recommends and explores alternative scenarios, such as delayed universal access, low carbon, climate change, and trade stagnation. For instance, the low-carbon scenario, which includes a carbon cost of $100 per ton of CO₂, would raise the investment requirement by $90bn as it emphasises renewable sources over fossil fuels. Meanwhile, the climate change scenario underscores the need for $6bn more to adapt to changes in rainfall that impact hydropower, particularly in Eastern Africa.
Funding energy needs will require mobilising both public and private capital, with a strong focus on enhancing regulatory frameworks to attract private investors. The report highlights the need for improved regulatory conditions, incentives for private sector involvement in mini-grid and off-grid development, and cost-reflective tariffs for utility sustainability. Additionally, it urges multilateral and bilateral donors to focus on risk-reduction mechanisms to facilitate private investments in generation and distribution sectors.
In conclusion, the report emphasises that, while the least-cost pathway for Africa’s power expansion aligns with a low-emissions strategy, significant investment is required to make it a reality. The Bank and its partners stress that achieving universal energy access by 2030 will hinge on coordinated efforts, substantial financing, and a commitment to sustainable growth across the continent.
This article is part of a series produced in collaboration with the African Development Bank in light of its sixtieth anniversary. Please visit our dedicated portal to read about the Bank’s history and its activities on the continent.