A new report by the International Energy Agency (IEA) has called for urgent, large-scale financing to close Africa’s electricity access gap, warning that current investment levels fall far short of what is needed to achieve universal energy access by 2035.
The report, titled “Financing Electricity Access in Africa,” estimates that the continent requires $150 billion in total investment over the next decade — equivalent to $15 billion annually — to bring reliable power to every household. Despite recent progress, the IEA warns that funding flows remain unevenly distributed and heavily concentrated in urban areas, leaving hundreds of millions of rural Africans in the dark.
According to the report, around 600 million people across Africa still lack access to electricity, a figure that has barely improved in recent years due to rising population growth, fragile infrastructure, and limited private sector involvement.
Investment Still Far Below Target
The IEA’s latest tracking data shows that in 2023, less than $2.5 billion was committed to new electricity access projects in sub-Saharan Africa — an improvement of 25 percent compared to 2019, but still only a fraction of what is required.
“While that is a quarter more than was committed in 2019, it still lags far behind what would be required to provide universal access by 2035,” the report noted.
More than 70 percent of the total investment in 2023 came from international public finance, primarily through development banks and bilateral aid programs, while private sector participation accounted for less than 30 percent.
The IEA warns that this imbalance poses a significant challenge to scaling up infrastructure, as long-term private investment is essential for sustainability and innovation. “Insufficient capital remains a key obstacle to expanding electricity access,” the report states, calling for blended finance models that combine public guarantees with private funding.
Rural Populations Left Behind
Despite Africa’s growing urbanization, the IEA highlights that 80 percent of the continent’s population without electricity lives in rural areas. Yet, investment continues to flow disproportionately to urban and peri-urban centres, where projects are seen as more commercially viable.
The report reveals that half of all electricity access financing in 2023 was concentrated in just six countries — Angola, Kenya, Mozambique, Nigeria, Senegal, and South Africa — leaving dozens of nations with minimal or no new access-related investment.
This geographic and demographic imbalance, the IEA warns, threatens to deepen inequality and slow progress toward Sustainable Development Goal 7 (SDG 7), which calls for universal access to affordable, reliable, sustainable, and modern energy by 2030.
“The uneven allocation of finance means that many of the poorest and most remote communities risk being left permanently behind,” the report cautioned.
Decentralised Energy Solutions as a Path Forward
To bridge these gaps, the IEA recommends a stronger focus on decentralised and off-grid energy systems, including mini-grids and solar home systems. These technologies, the agency notes, have proven cost-effective and rapidly deployable, particularly in regions where extending the national grid is prohibitively expensive.
The report calls for the development of innovative financing mechanisms that can attract both public and private investors to decentralised projects. These could include results-based financing, concessional loans, and risk-mitigation instruments that reduce investor exposure in fragile markets.
It further urges governments to design targeted financing approaches for communities living in informal settlements, fragile states, and humanitarian contexts, where the majority of Africa’s unconnected populations reside.
Affordability: The Next Big Challenge
Beyond expanding physical access to electricity, the IEA stresses the importance of affordability. Even where connections exist, millions of Africans cannot afford to consume enough electricity to meet basic household or business needs.
The report estimates that around 220 million people — about 40 percent of those currently without electricity — would be unable to afford a “basic bundle” of services such as lighting, phone charging, and small appliances. Meanwhile, 400 million people would struggle to afford an “essential bundle,” which includes power for refrigeration, fans, or small machinery.
To make electricity affordable, the IEA recommends deploying concessional capital to lower financing costs and attract more private sector participation. Governments, it adds, should also consider time-bound consumer or developer subsidies that can stimulate initial uptake without distorting markets in the long term.
“Ensuring affordability is as critical as expanding access,” the report notes. “Without targeted financial support, millions will remain connected in name only, unable to use electricity to meaningfully improve their lives.”
Reimagining the Role of Public and Private Finance
The report emphasizes that achieving universal access will require a radical shift in investment strategy. While development partners and multilateral lenders remain key players, the private sector must play a larger role in driving innovation and delivery.
The IEA suggests that governments establish clear regulatory frameworks that reduce risk and improve investor confidence, particularly in off-grid and mini-grid projects. Simplifying licensing, providing currency hedging mechanisms, and ensuring transparent tariff policies could help attract more domestic and foreign investors.
Concessional finance — low-interest or grant-based capital provided by development institutions — should be used strategically to leverage greater private participation, rather than replace it entirely.
“Public funds should serve as a catalyst, not a substitute, for private capital,” the report argues.
A Call to Action for Policymakers and Development Partners
The IEA’s findings come at a crucial moment, as Africa faces rising energy demand alongside global pressure to accelerate clean energy transitions. While many African governments have launched national electrification programs and renewable energy initiatives, financing bottlenecks continue to impede progress.
The report underscores that achieving universal access to electricity is not only a matter of infrastructure but also of social justice, economic growth, and climate resilience.
Investing in energy access, it notes, would unlock new opportunities for small businesses, education, healthcare, and digital services — all vital components for inclusive development.
A New Approach to Tracking and Accountability
For the first time, the IEA has introduced enhanced tracking tools to measure electricity access financing commitments across Africa. This new methodology allows policymakers and investors to better understand where financing gaps exist and how funds are being distributed.
By improving transparency, the agency hopes to help governments and partners align their efforts more effectively and ensure that future investments reach the communities most in need.
The Road Ahead
Ultimately, the IEA’s message is clear: Africa’s power gap cannot be closed without decisive and sustained financial action. The continent must mobilize ten times more investment annually than it currently receives to deliver reliable, affordable electricity for all.
Without this, the report warns, the dream of universal access by 2035 will remain out of reach — with profound implications for Africa’s economic future and its role in the global energy transition.
“Bridging Africa’s electricity divide is not just an energy challenge — it is a development imperative,” the report concludes.
— Africa Live News, Energy & Development Desk
