The poor state of many networks across Africa is slowing growth in renewable electricity provision, while off-grid solar may be faster and cheaper for rural areas
African leaders at a regional energy summit in Tanzania this week called for more investment in aging grid infrastructure in their countries to tackle widespread power outages that hamper major economies including Nigeria and South Africa, and to expand modern energy access to half of the 600 million people who lack it on the continent.
The conference was organised by Mission 300, an initiative launched in April 2024 by the African Development Bank and the World Bank to provide 300 million energy-poor Africans with electricity by 2030. This will be done mainly by connecting them to national grids or local minigrids powered by renewables such as solar.
The development banks have committed to collectively deliver $40 billion under the initiative – a target that was raised this week to more than $50 billion by contributions from other financial institutions, including the Asian Infrastructure Investment Bank (AIIB) with around $1.5 billion and the Islamic Development Bank Group with $2.65 billion.
To meet the Mission 300 goals, a first batch of 12 countries – Chad, Côte d’Ivoire, Democratic Republic of Congo, Liberia, Madagascar, Malawi, Mauritania, Niger, Nigeria, Senegal, Tanzania and Zambia – presented national energy compacts with detailed targets to scale up electricity access through renewable energy, as well as strategies to boost regional integration and attract private sector investment.
Presenting their plans, African leaders spoke of how outdated infrastructure has limited energy expansion on the continent and held back development in areas like healthcare, education, job creation and digital inclusion.
President Hakainde Hichilema of Zambia said African countries “need energy to develop our economies faster,” adding that “energy is life – as is water”- and energy is essential to extract water for human consumption, agriculture and industry, and keep people healthy.
He pointed to the need for a diversified energy mix coming from different sources including solar, hydro and geothermal, and emphasised that the power they generate must also be transmitted. “We need to take it where it’s needed,” he said.
Other countries echoed a similar concern in their energy compacts. Nigeria’s plan, for instance, stated that “the ability of the transmission system to evacuate available generation capacity is inadequate due to aging and poorly maintained infrastructure”. It called for “targeted concessionary lending to qualifying distribution companies (DISCOs) to strengthen distribution infrastructure”.
Tanzania also mentioned in its compact that the country’s electricity connections are faced with the challenge of “poor reliability and quality of service, caused by a deteriorating network with overloaded transformers [and] distribution feeders”. It called for improvements in the quality of the electricity service that “require investments in grid stabilization, network rehabilitation, reinforcement, and upgrades”.
African leaders at the Mission 300 energy summit (Photo: AfDB)
Makhtar Diop, managing director of the International Finance Corporation (IFC), noted that “a lot of the power outages in Africa are not linked often to production – they are often linked to distribution because the [electricity] network is not robust enough” and called for investments in distribution.
The companies managing distribution require capital injections because most are “under-capitalised and not in a good finance situation and therefore not able to invest in operational maintenance”, he added.
Meanwhile, the progress of some countries like Uganda shows that grid improvement and extension to improve distribution is achievable. With World Bank support, the country extended its grid and installed solar energy in health centres and water supply schemes, directly benefiting almost 8.8 million people in rural areas between 2016 and 2023. It has now embarked on another such project, involving the private sector.
Off-grid ‘cheaper and faster’
Off-grid electrification is also seen as key to the Mission 300 objective – and the energy compacts presented in Dar es Salaam reflected how, in the face of delays to grid extensions, distributed renewable energy (DRE) offers a faster means to electrify under-served communities.
Half of the Mission 300 goal is due to be achieved by off-grid connections. World Bank President Ajay Banga said geo-spatial mapping was being used within countries to decide which areas can be connected to the grid and which require DRE, including solar and battery storage systems that are “cheaper and faster” to install.
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Woochong Um, CEO of the Global Energy Alliance for People and Plant (GEAPP), said this group of government agencies, development banks and philanthropic foundations, is looking to support “hard-to-reach activities, like the productive use of the electrons by the farmers and people on the ground”. GEAPP is planning to pilot promising models that can be scaled up by banks if they produce successful results, he told Climate Home.
Sarah Malm, executive director of GOGLA, a global association for the off-grid solar industry, said off-grid systems “will complement weak grid environments” as the “least-cost and the fastest way to get basic energy access to households”, especially in rural communities.
“It provides light to study. It provides safety. It provides the ability for a kiosk to stay open at night. It provides really huge quality of life improvements – and then also, when light is intermittent and the grid doesn’t work, it is a source of back-up,” she said.
From 2020 to 2022, off-grid solar accounted for 55% of new connections in sub-Saharan Africa, according to the World Bank, and is projected to provide electricity access to nearly 400 million people by 2030.
Malm believes that off-grid solar is the best way to achieve the global goal of providing everybody with modern, sustainable power by 2030, because extending power grids is a long-term investment and progresses more slowly.
Private-sector investment
African leaders and energy backers at the summit highlighted the role of private-sector investment in fulfilling the goals of Mission 300.
“To actually achieve what we want to do, it requires more than public-sector money, it requires a lot of private sector,” said Akinwumi Adesina, president of the African Development Bank Group. He added that the private sector will play a role in delivering mini-grids and providing electricity to under-served areas.
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The cost of capital, however, is one of the major challenges facing businesses in Africa. Mission 300’s partners will “play a big role to reduce the risk using partial risk and credit guarantees” and provide long-term, low-interest capital, as well as develop bankable projects to attract private investors, Adesina said.
Um told Climate Home that GEAPP will work with multilateral development banks to help governments set up regulatory frameworks that can reassure the private sector their investments in African countries are safe.
Diop of IFC said the private sector is not yet as involved as it should be in financing clean energy development in Africa and this has constrained the uptake of renewable energy. He called for a “change in the paradigm” to catalyse heavy investment in renewables.
(Reporting by Vivian Chime; editing by Megan Rowling)
