By Wale Shonibare, African Development Bank’s (www.AfDB.org) Director of Energy Financial Solutions, Policy, and Regulation
Across Africa, the sunlight shines bright and natural resources abound. Yet despite that lies a pressing issue that threatens to stifle the continent’s growth and prosperity: the lack of access to reliable and sustainable electricity. As we prepare for the Africa Energy Summit (https://apo-opa.co/3PEPMUY), taking place on January 27-28, 2025, in Dar es Salaam, Tanzania, the urgency of addressing Africa’s energy needs cannot be overstated. Without power, Africa cannot achieve its development aspirations and take its rightful place at the global first table. This summit is a critical step towards unlocking Africa’s vast potential and empowering its people.
The Stark Reality of Energy Poverty and Africa’s Power Sector
Today, nearly 600 million Africans—approximately half the continent’s population—still live without access to electricity. For these individuals, daily life is a struggle illuminated by the dim glow of kerosene lamps or the intermittent hum of diesel generators. These stopgap solutions are not only expensive but also polluting, perpetuating a cycle of poverty and environmental degradation. At the current pace of electrification and with Africa’s rapid demographic growth, the number of people without electricity will remain largely unchanged unless we take bold and immediate action.
What makes this challenge significant in Africa is that, for many decades, the power sector has faced numerous interlocking challenges which include inter alia, low access rates, lack of maintenance, lack of investment, non-cost reflective tariffs, unaffordable subsidies, and lack of financial sustainability. Most of Africa’s public utilities are in financial distress – they struggle to cover their operating costs and cannot finance the required capital expenditure to maintain their operations, thus forcing them to rely on public subsidies.
At the same time, most of the financing available for energy projects today is in hard currency, which is not always sustainable because energy services are paid for by local populations in local currencies, thus resulting in a currency mismatch occasioned by the volatility of local currencies against international hard currencies. In addition, regulatory authorities are subject to political interference in most African countries, which affects their decision-making and ability to implement policies that support long-term sector development.
I believe passionately that without access to reliable, affordable, and sustainable electricity, Africa will not achieve its development aspirations. Energy access is the cornerstone of economic transformation, unlocking opportunities for education, healthcare, gender equality, and income generation. It is a prerequisite for creating a green and resilient future, one where poverty is a relic of the past.
Mission 300 (https://apo-opa.co/3PEPMUY): A Bold Vision for the Future
In response to this urgent need, the African Development Bank Group, the World Bank, and other partners have launched an ambitious initiative known as Mission 300 (https://apo-opa.co/3PEPMUY). This initiative aims to provide electricity access to 300 million Africans by 2030. Mission 300 is not just a number; it represents lives transformed, economies revitalized, and communities empowered.
The plan focuses on accelerating electrification through a mix of grid extensions and distributed renewable energy solutions, such as mini-grids and stand-alone solar home systems. These solutions are particularly effective in reaching fragile and remote areas where traditional grid infrastructure is impractical. Complementing these efforts are investments in generation, transmission, regional interconnection, and sector reform to ensure that power supply is not only reliable but also affordable and sustainable.
Partnerships and Reforms: The Keys to Success
Mission 300 will only succeed with the collective efforts of governments, private sector stakeholders, and international partners. Governments must lead the charge by implementing critical reforms to make the energy sector more efficient and utilities more robust. Transparent and competitive tendering processes for new generation capacity, along with cost-recovery mechanisms for utilities, are essential. Regulators will have to respond with appropriate nimbleness and innovation to stay responsive to a fast changing technological and business environment. Governments and development partners must amplify the call for regional electricity trade to facilitate a shift away from the single-buyer model as well as allow the sustainable integration of Variable Renewable Energy (VRE) into weak grids to help shape the energy transition pathways of African countries.
Private sector participation is crucial for addressing Africa’s energy challenges, especially considering Africa’s rapidly growing population and the need for increased investment. The private sector is already playing a vital role in expanding renewable energy access, particularly through decentralized energy solutions, an area where traditional utility-scale projects face limitations due to infrastructure constraints. Meanwhile, multilateral development banks and philanthropic organizations must step up in unlocking private capital for the energy sector through targeted financing instruments, risk mitigation tools, technical assistance and policy advocacy.
The recently launched Technical Facility Accelerator Fund (https://apo-opa.co/3CaOjmm) is a promising step in this direction, providing technical assistance to governments and helping streamline processes to achieve Mission 300 targets.
A Defining Moment: The Africa Energy Summit
The upcoming Africa Energy Summit represents a pivotal moment for the continent. Hosted by the Government of the United Republic of Tanzania, the African Union, the African Development Bank Group, and the World Bank Group, this summit will bring together heads of state, energy experts, and private sector leaders to forge a path toward universal energy access.
At the summit, several African governments will present their national energy compacts, outlining their commitments to reforms and near-term actions to achieve their energy targets. These compacts will showcase the innovative strategies and partnerships being deployed to advance universal energy access in a reliable, affordable, and sustainable manner. The summit will also highlight the critical role of international partners such as the Rockefeller Foundation, Sustainable Energy for All (SEforALL) (https://apo-opa.co/40D8wdO), and the Global Energy Alliance for People and Planet (GEAPP), who are mobilizing resources and expertise to support this mission.
Significantly, the summit will unveil some new spending commitments and innovative initiatives designed to encourage African Countries to mobilize more of their domestic resources to finance the accelerated roll-out of green energy infrastructure across the continent.
Why Now?
The convergence of technological breakthroughs, digitization, and innovative financing models makes this the most opportune time to tackle Africa’s energy challenges. Achieving Mission 300 will not only light up homes and businesses but also drive progress in education, healthcare, and gender equality. It will reduce emissions, enhance welfare, and boost income generation and financial inclusion across the continent.
As we gather in Dar es Salaam, let us be reminded that energy access is more than just a technical challenge; it is a moral imperative. By working together, we can transform the energy landscape of Africa and, in doing so, create a brighter, more prosperous future for millions.
Let us make Mission 300 a turning point. Let us make sure the 13 landmark compact agreements (https://apo-opa.co/3C1OzUL) signed this week point the way to lighting up the rest of our continent.
Distributed by APO Group on behalf of African Development Bank Group (AfDB).
About the African Development Bank Group:
The African Development Bank Group (AfDB) is Africa’s premier development finance institution. It comprises three distinct entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). On the ground in 44 African countries with an external office in Japan, the AfDB contributes to the economic development and the social progress of its 54 regional member states.
For more information: www.AfDB.org