Inside Africa's energy gamble
Environment & Climate
By
Mactilda Mbenywe
| Nov 01, 2025
Panelists Seraphine Wakana, Gloria Magombo, Kandeh Yumkella, Abdulla Balalaa and Dr Senalor Yawlui, during the APRA forum in Freetown. [Mactilda Mbenywe, Standard]
African energy ministers are quietly rewriting the rules of the power market.
In public, they talk about ‘universal access’, but behind closed doors, they talk about who can actually pay.
But mining firms, smelters, and fertiliser plants can pay and in foreign currency. So governments are redesigning energy markets around them.
“We have opened the market beyond the single-buyer model,” said Dr Gloria Magombo, Deputy Minister of Energy “Private producers can now sell directly to large intensive users including mineral smelters earning in forex. That brings certainty for investors and lenders.”
READ MORE
The comment that cost Kenya Sh15b after Moody's misstep
Safaricom unveils a Sh30 billion education initiative
Susan Kibue: Kenya's first female professor of architecture
Inside government's direct tech-driven VAT refunds plan
From rot to revenue: How farmers are redefining waste into wealth
Kenyans grapple with stagnation, decline in earnings
Regional units push Equity profit to Sh52.1b as Kenyan economy slows
Agriculture sector borrowing balloons to Sh167.7 billion
It’s a quiet revolution with deep consequences for Africa’s energy future.Across Africa, nearly 600 million people still lack electricity.
Yet, ministers at APRA spoke mostly about megawatts for industrial corridors, not for homes.
In Sierra Leone, Dr Kandeh Yumkella, Chaiman, Presidential Initiative on Climate Change, Renewable Energy said the mining sector alone will need 500 megawatts more power in the next six years equal to the combined consumption of several small African nations.
“This is not about rural electrification,” he admitted. “It’s about baseload for extraction and processing.”
Sierra Leone is pitching itself as a regional hub where independent power producers (IPPs) can build plants to supply Guinea, Liberia, and beyond a potential 60-million-person demand zone driven largely by mining and manufacturing.
In Ghana, Dr Senalor Yawlui, High Commissioner of Ghana to Sierra Leone described a similar shift. The government’s renewable master plan is tied directly to its 24-hour economic agenda powering manufacturing, battery assembly, and electric vehicle production.
“Renewables must feed green industrialization and job creation,” said Yawlui policymaker. “That is how we make the transition pay for itself.”
The logic is simple. Investors finance power plants only when they know who will buy the power.
Households are not “bankable.” Political utilities with arrears and frozen tariffs are not bankable. Mines and factories are.
Developers at the forum said financiers now ask one question first: who is your offtaker?
If the answer is “a national utility,” the deal often collapses, but if the answer is ‘a mining company exporting gold or lithium’, the deal moves.
“We need to give confidence to the offtaker,” Dr Gloria Magombo, Deputy Minister Ministry of Energy, Zimbabwe said, adding, “When you allow every customer to prepay, you give investors confidence that the money will be collected.”
Some countries are going further. Zimbabwe is using domestic insurance and pension funds to back “bankable” projects after international lenders deemed it high-risk.
That means ordinary workers’ retirement savings are now tied to power plants serving industry first, with the political promise that households will benefit “later.”
The APRA forum laid bare the imbalance.
In 2023, Africa attracted only US$15 billion in renewable investment about 2.3 percent of global totals.
The continent needs US$70 billion annually to meet its energy transition goals by 2030.
Of that limited finance, 58 percent came from public funds, and only 42 percent from private investors.
Private financiers are deterred by political risk, weak utilities, and uncollected bills.
That’s why governments are trying to de-risk the market through direct industrial power purchase agreements (PPAs), foreign-exchange guarantees, and revenue insurance.
Ghana, for example, is creating a Renewable Energy Investment and Green Transition Fund to “de-risk private participation.”
Sierra Leone’s government has approved a US$108 million gas-to-power project and is using the Millennium Challenge Corporation’s US$484 million grant to fund new transmission lines.
Zimbabwe has raised US$70 million to expand its hydropower capacity and another US$9 billion in identified projects for generation, transmission, and distribution.
Every minister agreed on one painful truth: utilities are the weakest link.
They owe producers millions, lose up to 40 percent of generated power through theft and technical losses, and face political pressure to keep tariffs low.
“If utilities are bankrupt and losing money, no investor will come,” said Yumkella, “We have to reform them, or we kill the sector.”
Reform, however, is politically explosive.
When Mexico tried to unbundle its national utility, union workers went on strike.
African ministers fear the same backlash.
Some of the panelists during the APRA forum in Freetown. [Mactilda Mbenywe, Standard]
Prepaid smart meters now being rolled out across cities are one response.
They prevent arrears but also expose the poor to disconnections when they cannot pay.
“The power is not free,” said Antonio Manda, Deputy Minister, Minister of Minerals and Energy, Mozambique “Government subsidies hide the real cost, but at the end, someone pays.”
Energy poverty remains Africa’s biggest development gap, yet the ministers’ solutions now rely on industry cross-subsidizing households.
Industrial PPAs provide the cash flow. Pension and insurance funds provide the collateral.
Households come last in the sequence politically visible, but financially invisible.
Magombo said: “We are not just powering homes. We are powering factories that will employ those in the homes.”
Critics argue that approach repeats the colonial pattern exporting raw value chains while communities remain in the dark.
Supporters counter that without industrial revenue, there will be no grid to connect anyone to.
The tension defines Africa’s energy transition today.
Africa holds 30–40 per cent of the world’s critical minerals lithium, cobalt, titanium, bauxite essential for solar panels and batteries.
Yet most of its solar hardware and battery storage systems are still imported. Ministers now frame in-continent manufacturing as a political condition for any new deal.
“There will be no global energy transition without Africa,” said Yumkella “But we want to retain value. We want to be the hub for building batteries and solar panels.”
That ambition comes with cost.
New industrial energy parks demand reliable power often gas-fired or grid-connected renewables long before villages see their first electric bulb.
What emerged in Freetown was political trade-offs. To attract private investment, ministers are offering regulatory certainty and new rules that favor industrial offtakers.
To keep tariffs low for households, they are leaning on cross-subsidies from mines and factories.
And to fill the financing gap, they are turning to domestic pension and insurance funds instruments never designed to carry energy-sector risk. It is a pragmatic, if uneasy, formula for survival.
The contradiction within this model is unavoidable. Africa’s clean energy scale-up is being built for industries that export minerals and metals, not for citizens who light kerosene lamps at night.
Yet without those industrial buyers, there would be no investment at all Dr. Fadhel Kaboub, Associate Professor of Economics, Denison University said “If we build power for mines and factories but not for people, we will have energy transition without energy justice.”
The ministers left Freetown with optimism and new pledges German grants, Danish aid, and AfDB loans.
But the underlying arithmetic remains unchanged. The poor cannot pay. The utilities cannot collect. So governments are betting that industry will.
The real question is whether that model will ever trickle down.
Kaboub warned: “If we build power for mines and factories but not for people, we will have energy transition without energy justice.”