Keypoints
- Africa’s energy transition must be Africa-led
- Finance, integration, and policy are critical
- Local value creation ensures long-term impact
FOR decades, Africa’s role in the global energy transition has been viewed through an external lens. Policymakers, investors and climate campaigners from outside the continent have often assumed that Africa would follow the same trajectory as developed economies. This assumption ignored the continent’s different realities: limited infrastructure, restricted access to capital, and less influence in international decision-making on energy and climate.
That mindset is increasingly out of step with the facts. Africa’s priorities—expanding energy access, driving industrial growth, and strengthening resilience—cannot be imported wholesale from Europe or North America. The continent is actively engaged in the global transition to cleaner energy, but it is doing so on its own terms, in ways that make sense for African societies and economies.
At the African Refiners & Distributors Association (ARDA), we believe that Africa’s energy transition must be designed in Africa, for Africa. It must balance three imperatives: expanding access to reliable energy, powering industrialisation, and protecting the continent’s energy security. That requires policies, financing mechanisms and partnerships that are tailored to local realities, rather than borrowed from foreign models that may not work here.
Building on African strengths
Across the continent, governments and companies are investing in diverse energy portfolios that reflect both domestic needs and international sustainability targets. In Angola, construction is advancing on a 35MW solar project, part of a wider pipeline exceeding 3GW of planned solar, wind and hydropower. In Uganda, the 250MW Bujagali hydropower plant remains crucial to stabilising the national electricity supply. And in South Africa, a 316MW solar PV installation combined with 500MWh of battery storage represents a major step toward balancing renewable power with reliability.
These projects are not isolated cases. They illustrate a broader trend of African-led solutions that are designed to deliver long-term impact. The continent is not merely catching up with global energy developments; in some areas it is leapfrogging traditional models by integrating renewables and storage from the start.
However, bold ambition must be matched with structural follow-through. If Africa’s energy transition is to succeed, three factors are decisive: sustainable finance, regional integration and predictable policy frameworks.
Sustainable finance
The African Development Bank has estimated that Africa’s energy transition will require around $100bn per year between 2020 and 2040. Current capital flows fall far short of that figure. Even when funding is available, it often comes with higher risk premiums, shorter loan tenors and inflexible conditions that deter large-scale investment.
To close this gap, Africa must pursue financing strategies that blend public and private capital, reduce investor risk, and align international climate finance with African development priorities. ARDA has long championed models that bring these elements together.
It is also vital to prioritise projects that combine renewable energy with storage systems. These not only cut emissions but also guarantee consistent electricity supply, sustain industrial output and reinforce economic resilience. Such projects represent the most bankable way to align climate objectives with Africa’s urgent need for reliable power.
Regional integration
Africa’s fragmented energy landscape poses another obstacle. Many countries depend on small, underpowered national grids that cannot attract large-scale investment or integrate renewables effectively. Regional integration—through harmonised regulations, cross-border infrastructure and shared resources—is essential.
The African Single Electricity Market (AfSEM) and the African Continental Free Trade Area (AfCFTA) already provide frameworks for cooperation. What is now required is the political will to implement them, backed by investments in cross-border transmission, grid stabilisation and regional regulatory bodies.
By linking national markets into larger, more efficient systems, Africa can unlock economies of scale, attract investors, and secure more stable electricity supplies. Regional power pools have already shown that sharing resources makes both economic and environmental sense.
Policy frameworks
Alongside finance and integration, investor confidence hinges on predictable policy frameworks. Africa is attracting attention from global energy investors, but uncertainty over regulations and permitting processes continues to raise costs and delay projects.
Governments must therefore put in place policies that simplify and accelerate the development of energy projects. Feed-in tariffs, tax incentives, streamlined permitting systems and transparent regulations can all help reduce uncertainty and make long-term investment more attractive.
ARDA works with policymakers across the continent to design frameworks that enable private sector participation while ensuring that projects deliver lasting local value.
The countries that will lead Africa’s energy shift will be those that offer transparent, stable environments where public and private actors can collaborate with confidence.
Local value creation
Africa’s energy transition must not only reduce emissions but also generate local value. Every megawatt generated should be seen as more than just electricity—it should represent jobs created, businesses empowered, and supply chains strengthened.
This means focusing on skills development, technology transfer and the growth of new industries. From battery production to green hydrogen, Africa has an opportunity to embed new value chains at home rather than exporting raw materials and importing finished technologies.
If the transition is managed wisely, it can drive industrialisation, boost trade under AfCFTA, and position Africa as a key player in emerging global markets for clean technologies.
Transition fuels and resilience
While renewables are the long-term destination, Africa must also make pragmatic choices for the medium term. Cleaner fuels such as natural gas remain vital for replacing higher-emission diesel and fuel oil in both power generation and transport.
Mozambique, with its significant reserves and ongoing LNG projects, is a case in point. Its resources can underpin regional power supply while supporting industrialisation. Transition fuels provide the reliability needed to build renewable capacity without compromising energy security.
Recognising this balance is crucial. Africa cannot afford to risk blackouts or underpowered grids in the name of transition. Reliability and inclusivity must go hand-in-hand with decarbonisation.
The global dimension
Africa’s energy transition is not only a continental priority but also a global one. A successful shift will benefit the international community by reducing emissions, diversifying global supply chains, and opening new markets for trade and investment.
But the pace of this transition depends heavily on how quickly and decisively global partners step up support. International climate finance must be mobilised in ways that align with Africa’s growth and development priorities, rather than imposing conditions that fail to account for local realities.
A forward-looking agenda
The investments Africa makes today will determine the continent’s trajectory for decades. Choosing smart financing mechanisms, embedding regional integration, and creating stable policy environments will be critical to building an energy system that is clean, reliable and inclusive.
At ARDA, we see the energy transition as a chance to reset Africa’s role in the global economy. It is an opportunity to design an African-led strategy that builds resilience, drives industrialisation and enhances energy security while contributing to the global fight against climate change.
The real question is not whether Africa will make this shift, but how quickly and decisively the world is prepared to support it.
Anibor Kragha is the Executive Secretary, African Refiners & Distributors Association (ARDA) (https://ARDA.Africa/).
