Modernising Africa’s energy infrastructure has never been easy. It isn’t easy today, and it won’t be easy tomorrow. But difficulty is not the same as impossibility—as we continue to see encouraging signs of increased momentum around energy development.

 

Across Africa, energy infrastructure projects are gaining traction. Renewable energy developments are expanding. Natural gas is increasingly recognised as a stabilising and pragmatic part of the energy mix. Compared with a decade ago, the progress is real.

However, that progress is only part of the equation.

Throughout Africa we are slowly transitioning away from the question of “whether individual energy projects can be built,” and must now be asking “whether most importantly energy systems can be built at pan-Africa scale—systems that connect generation, transmission, industry, and regional markets into something coherent, resilient, and competitive.”

First, it is imperative that African governments begin thinking about energy development in terms of systems and not individual projects. Historically, energy development across the continent has been treated as a series of one-off projects.

This approach was completely understandable to get things moving in the right direction, but on their own, this disjointed approach does not meet the need at hand or enable the scale necessary to ensure energy security.

Governments have a critical role to play in changing this mindset.

Energy infrastructure must be planned holistically. That means viewing natural gas and renewable energy not as competing ideologies, but as complementary tools within a broader system. It also means recognising that generation without transmission is incomplete investment.

Updating and expanding electrical grids—domestically and across borders—is not a secondary task. It is the connective tissue that determines whether power reaches industries, cities, and communities reliably and affordably.

By working together, African governments can add incredible value by: setting long-term energy blueprints rather than reacting project by project, establishing regulatory clarity and guardrails that reduce uncertainty, coordinating grid upgrades alongside new generation, and by creating conditions where private capital can finance and build at scale.

Initiatives like the Africa Single Electricity Market (AfSEM) illustrate what a system approach can look like in practice. AfSEM’s ambition—to connect African power systems by 2040—recognises that national grids alone cannot meet future demand efficiently. Regional coordination spreads risk, lowers costs, and strengthens resilience.

Another example of regional coordination is the Zambia-Tanzania-Kenya Interconnector that will eventually provide power to the Southern African Power Pool (SAPP).

AfSEM, the Interconnector, and SAPP offer a broader lesson: complex economic challenges are easier to solve when countries collaborate around shared frameworks.

Energy integration can—and should—serve as a blueprint for cooperation across trade, industry, and infrastructure more broadly. All of Africa’s governments need to make this type of comprehensive energy coordination a top priority.

Failure to do so could result in critical energy inequalities between countries that could cripple individual economies and curtail regional growth for decades to come.

Second, Africa’s institutional investors, with billions in available capital, are uniquely positioned to promote development at the ecosystem scale. Governments cannot be expected to accomplish this alone.

If Africa is to build the energy capacity required for sustained growth, African institutional investors must play a far more active role—not just in individual assets, but in financing entire energy ecosystems.

Pension funds, insurers, and sovereign investors across the continent manage capital designed for long-term deployment. Yet much of this capital remains invested abroad or in government bonds, while domestic energy systems struggle to keep pace with demand.

This hesitation is understandable based on historical thinking, policies, and underlying political risk. Large-scale grid and transmission projects are complex. They involve regulation, long timelines, significant development capital and coordination across jurisdictions.

However, avoiding these investments carries serious risks as well—slower growth, weaker industrial bases, continued energy insecurity, and a continued disjointed and ad hoc approach to energy investment without seeing the bigger opportunity.

Energy systems are foundational assets. Especially considering the massive potential from Africa’s abundance of energy sources, including a combined 60 percent of the world’s best solar, hydropower, wind, and geothermal resources and vast, proven oil and natural gas reserves (Forbes, 2024).

Properly structured energy systems can provide long-duration, predictable cash flows and system-wide impacts that strengthen economies.

When energy investing is implemented holistically, access to reliable energy can trigger a ripple effect, unlocking immense value across multiple sectors at once - generation, industry, logistics, services, and even for individual households.

With Africa’s population expected to reach 25 percent of the world’s population by 2050, establishing this much needed demand across sectors reduces the risk that power plants operate below capacity, that industries face unreliable supply and that households remain without access to power.

For African institutional investors, this is not just an opportunity—it is a responsibility aligned with their mandate to support long-term economic stability.

The stakes are high and the evolution of African governments and institutional investors is critical.

Reliable energy is a prerequisite for industrial growth, digital infrastructure, and job creation. It is essential for mining—an industry that will only grow in importance as global competition for critical minerals and rare earths intensifies.

These operations are energy-intensive and intolerant of instability. Without strong grids and dependable power, value-added processing and downstream industries simply will not materialize.

Additionally, if Africa intends to compete globally with artificial intelligence (AI) and data centres, access to abundant reliable energy will be critical.

Energy security, then, is not a technical issue. It is an economic and strategic imperative!Building that security requires coordination between governments setting the blueprint and navigating land ownership issues, private developers building projects, and institutional investors providing patient capital.

Africa’s energy future will not be decided by any single project or investor. It will be shaped by whether governments and capital providers are willing to work together—across borders, across technologies, and across time horizons.

The task is difficult. But the direction is clear.

Adopting a new playbook, by thinking in systems rather than silos, and investing in energy ecosystems rather than isolated assets, offers the strongest path toward a connected, competitive, and energy-secure Africa.

The work is hard. The payoff—economic resilience and global competitiveness—is worth it.

Dr Herta Von Stiegel is founder & CEO of Ariya Capital Group and chairperson of Britam Asset Managers (Kenya) with Daniel R. Weber, Communications Consultant for Ariya Capital Group.

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