Electrification in Africa is a monumental task with far-reaching implications. Despite the continent’s abundant natural resources, a lack of finance and construction challenges continue to impede progress in bringing renewable electricity to its people.
The Realities of Energy Poverty
Basic amenities that are taken for granted in high-income countries, like using a fridge to store food, are luxuries in many parts of Africa. “Basic things to those who live in high-income countries, like using a fridge – which means that your food can be stored for longer – were not possible,” says Benjamin Memmi, CEO of Axian Energy, recalling the situation in Madagascan communities before they were connected to electricity.
Oluwole Eweje, CEO and founder of Watt Renewables, shares a similar experience. “You are so used to sleeping in the dark, reading with lanterns or candles that you cannot really conceptualize a place with a reliable grid,” he says, describing his childhood in Nigeria with limited access to electricity.
Rebecca Aime, CEO and founder of Patapia, a Ugandan enterprise that provides refugees with loans to buy affordable clean energy products, speaks of the struggles her family faced as refugees. “I think if my mother had access to capital, she could have started a business, then all of this suffering would not have happened. I want to give other refugees access to energy so that they can access more opportunities.”
Eweje and Memmi are among the leaders working to close the energy gap, providing mini-grid or off-grid solar solutions to communities. “There are many infrastructure problems in Nigeria but I chose energy because I believe that the key route to modernization of economies is to have reliable power, first and foremost with electricity,” says Eweje.
The Importance of Electrification
Reliable energy access can transform lives, opening up countless opportunities for individuals and communities. World Bank research shows a strong correlation between increased electricity use and GDP growth, highlighting electricity’s role in driving industrial and economic activity.
Axian-owned WeLightAfrica, which deploys and operates mini-grids in rural areas, reports significant social benefits from electrification. According to its 2023 impact report, electrifying schools near its projects has increased students’ exam pass rates by 35%. Similarly, extending electricity to healthcare centers has improved care for 10,500 women who gave birth at night.
Despite these successes, around 600 million people in Africa still lack access to electricity, according to the International Monetary Fund. As the continent industrializes and its population doubles by 2050, the demand for electricity will continue to rise.
The Potential of Renewable Energy
Meeting Africa’s growing energy needs with renewable sources is not only feasible but also essential. Don’t Gas Africa, a group advocating for an end to fossil fuels on the continent, points out that Africa’s lack of centralized fossil fuel grids presents an opportunity to leapfrog directly to advanced and affordable renewable energy technologies.
Africa is home to 60% of the world’s best solar resources, according to the International Energy Agency (IEA). Energy experts and campaign groups emphasize that leveraging these resources can help Africa achieve universal access to electricity without increasing fossil fuel emissions.
Overcoming Challenges
Significant challenges still hinder the execution of renewable energy projects in Africa. Eweje, who often works in remote parts of Nigeria, identifies site access as a major difficulty. “Infrastructure building is hard. You are hauling tons of equipment, which could take you half a day. You don’t necessarily have the right tools for it, there’s no fancy forklift. This makes it tough in the distributed energy space,” he says.
Chris Flavin, interim CEO of UK-government-backed Gridworks, highlights the complexities of project development. “One of the biggest challenges is the project development phase, carrying out detailed feasibility reports for the line, designing infrastructure, dealing with environmental and social concerns – as there are people living in the path of the line who will need to be compensated.”
Engaging Local Communities
Compensation and community engagement are crucial for the success of renewable energy projects. Development finance institutions (DFIs) and private investors require companies to fulfill sustainability requirements and ensure that local communities benefit from the projects.
Mohamed Mansour, chairman of Infinity Power, underscores the importance of involving local communities. “You definitely have to get local communities involved, otherwise there is no project. It is not an issue, but a blessing if you do the right thing. We really try to do more than just tick boxes,” he says.
Financing the Transition
Financing remains a critical challenge. Gridworks’ project in Mozambique, which will be the first of its kind in the country to use private investment for electricity transmission, reflects the need for innovative financing solutions. “Government balance sheets are struggling to sustain this level of borrowing,” says Flavin. “The pandemic has made it tough. Governments need to look more widely. Private finance has been used around the world when countries have had to expand their grids.”
Africa’s total external public debt has almost tripled since 2009, forcing countries to divert funds from public spending to debt servicing. According to the International Renewable Energy Agency (IRENA), Africa must de-risk and promote private sector investment to meet its energy needs, which far exceed available public funds. Despite accounting for one-fifth of the world’s population, Africa attracts only 3% of global energy investment.
Rebecca Aime stresses the need for sustainable business growth. “We (as an enterprise) also need to survive and make our business sustainable. Part of that is growing and scaling in the way we want to… we need money for that,” she says.
The Path Forward
Increasing energy investment in Africa is not just about lighting up homes and powering industries; it’s about transforming lives and driving sustainable economic growth. By prioritizing renewable energy and engaging local communities, Africa can leapfrog to a future of reliable, sustainable energy access for all.
