- Investment in expanding electricity access across Africa is increasing but remains far short of the levels required to close the continent’s massive energy access gap, according to a new report by the International Energy Agency (IEA).
The report, Financing Electricity Access in Africa, finds that around 600 million people in Africa still live without electricity. Achieving universal access by 2035 will require an estimated $150 billion in investment over the next decade — roughly $15 billion per year. However, the IEA’s latest tracking shows that only about $2.5 billion was committed to new electricity access projects in sub-Saharan Africa in 2023, despite this being a 25% increase from 2019 levels.
The IEA notes that the stagnation in progress reflects deep-rooted challenges, including tight government budgets, a difficult macroeconomic environment, and declining development aid. Yet, it says universal access remains achievable with the right policies and greater collaboration among governments, private investors, and development finance institutions.
More than 70% of electricity access investment in 2023 came from international public finance, while private investors contributed less than 30%. The report stresses that in a scenario achieving universal access by 2035, total investment must increase substantially — with private finance accounting for about 45% of the total. To unlock this capital, the IEA recommends targeted regulatory reforms, integrating electrification into national planning and rural development, and strengthening policies that stimulate electricity demand and rural economic growth.
The report also calls for a tenfold increase in equity financing for access projects and improved use of grants through results-based funding mechanisms. Concessional finance is expected to make up around 40% of the total investment required over the next decade, particularly in low-income and vulnerable communities, early-stage project development, and capacity building.
Currently, most financing is concentrated in urban areas and a handful of countries, even though 80% of those without electricity live in rural regions. The IEA urges the expansion of innovative financing mechanisms to support decentralised solutions, such as mini-grids and solar home systems, as well as targeted approaches for informal settlements, fragile states, and humanitarian settings.
Beyond expanding connections, the report highlights affordability as a major barrier. It estimates that an additional $2 billion per year is needed to ensure that basic electricity services remain affordable. Around 220 million Africans — 40% of those without access — cannot afford even a basic bundle of services, while 400 million cannot afford essential levels of electricity.
The IEA suggests that concessional funding could help lower financing costs and attract private investment, while governments could deploy time-bound subsidies for consumers or developers to make electricity more accessible and affordable.
Link to the full report HERE
Author: Bryan Groenendaal
