The landscape of African development is at a critical juncture. Despite possessing an immense wealth of natural resources, the continent is grappling with a profound energy crisis that stifles economic progress and human potential. In a recent and urgent address, the outgoing President of the African Development Bank (AfDB), Dr. Akinwumi Adesina, shone a stark light on this reality, revealing that an estimated 600 million people in Africa still lack access to electricity.

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Speaking at the 2025 Standard Chartered Bank Africa Summit in Lagos, Adesina emphasized that this energy deficit is not a result of a lack of resources, but rather a lack of adequate investment. He pointed to the continent’s staggering renewable energy potential, including 11 terawatts of solar, 350 gigawatts of hydro, 150 gigawatts of wind, and 15 gigawatts of geothermal energy. Yet, he lamented that this vast potential remains largely untapped. Adesina’s message was clear: unlocking these resources is not just an environmental imperative, but a fundamental prerequisite for powering massive industrial development and positioning Africa to become a globally competitive force.

The gravity of this situation demands a significant financial commitment from both the public and private sectors, a point that Adesina repeatedly underscored. The AfDB, in partnership with the World Bank, has taken a decisive step with the launch of “Mission 300,” an ambitious initiative aimed at connecting 300 million people to electricity by 2030. This initiative, he noted, requires a total of $127 billion, with over $61 billion expected to come from the private sector.

Beyond the numbers, Adesina’s address was a broader call for a fundamental shift in mindset. He stressed the need for Africa to transition “away from aid to investment” and to establish mechanisms that prepare “bankable energy and infrastructure projects.” He argued that achieving faster, more stable economic growth necessitates a pivot toward capital mobilization from domestic resources, capital markets, foreign direct investment, and concessional finance. This sentiment extends to the continent’s broader development goals, with Adesina stating that Africa needs at least $1.3 trillion in annual financing to meet the United Nations Sustainable Development Goals (SDGs) by 2030. The conclusion of his message was one of cautious optimism, asserting that Africa has all it takes to achieve its bold ambitions, but that this depends heavily on how quickly and effectively capital is mobilised.

The Human and Economic Cost of Energy Poverty

The 600 million Africans living without electricity are not just a statistic; they represent a population whose daily lives and long-term futures are profoundly impacted by energy poverty. This lack of access has far-reaching socio-economic consequences, perpetuating cycles of poverty and hindering human development. In households across the continent, particularly in rural areas, the absence of electricity means a continued reliance on traditional biomass fuels such as charcoal, wood, and kerosene for cooking and lighting. This practice has severe health implications, leading to indoor air pollution that causes respiratory illnesses and other health issues, disproportionately affecting women and children.

Furthermore, energy poverty stifles entrepreneurship and economic activity. Small businesses, especially in rural communities, operate at extremely low productivity levels due to the lack of reliable power. This prevents growth, discourages the creation of new enterprises, and limits opportunities for innovation and economic diversification. The inability to use modern machinery or access digital tools means that businesses remain informal and struggle to scale. For students, the impact is equally devastating. Without electricity, studying after dark becomes a major challenge, often relying on hazardous and inefficient light sources like kerosene lamps. This directly hinders academic performance and limits access to online educational resources, widening the educational gap between urban and rural populations. According to a study published on Emerald Insight, reducing energy poverty significantly increases new business creation and improves health and internet access, underscoring the deep link between energy and socio-economic well-being.

Tapping into Africa’s Renewable Goldmine

As Dr. Adesina highlighted, Africa’s energy crisis is a paradox of scarcity amid abundance. The continent’s renewable energy resources are among the largest in the world, with potential to not only meet its own needs but also to become a global exporter of clean power.

• Solar Power: With some of the highest levels of solar irradiation on the planet, Africa’s solar potential is staggering. Countries like Namibia and Morocco are already harnessing this advantage. The African Development Bank’s “Desert to Power” initiative, for example, aims to create a 10 GW solar zone across the Sahel region to provide electricity to 250 million people, turning the sun-scorched desert into a new source of economic and social prosperity.
• Hydropower: Africa’s major rivers, including the Nile, Congo, and Zambezi, offer immense potential for hydropower. Projects like the Grand Ethiopian Renaissance Dam and the planned Grand Inga Dam in the Democratic Republic of Congo could reshape the continent’s energy grid, offering a stable and reliable source of clean power.
• Wind and Geothermal: Significant wind corridors exist along Africa’s coastlines and highlands. Kenya, in particular, has become a global leader in geothermal energy, with its Olkaria complex producing over 800 MW and making the country the eighth-largest geothermal producer in the world. Its Lake Turkana Wind Power Project, the largest wind farm in Africa, adds another 310 MW to the grid.

However, the path to unlocking this potential is fraught with challenges. Insufficient and outdated grid infrastructure, a lack of clear regulatory frameworks, and the high cost of initial capital investment all present significant barriers. The intermittency of solar and wind power, while a challenge, is being addressed through new technologies like battery storage and the development of green hydrogen, a key focus area for countries like Namibia and South Africa. These innovations are crucial for ensuring a stable and reliable energy supply that can support industrial-scale operations.

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“Mission 300”: A Bold Roadmap for Universal Access

The “Mission 300” initiative, launched by the AfDB and the World Bank, represents a concerted and collaborative effort to address the energy access gap head-on. The goal is to connect 300 million people to electricity by 2030, with the World Bank aiming to connect 250 million and the AfDB contributing the remaining 50 million. This partnership is designed to mobilize not only finance but also political will and technical expertise.

A core component of Mission 300 is the development of National Energy Compacts, which have been unveiled by 12 African countries, including Nigeria, Senegal, Tanzania, and Zambia. These compacts are detailed strategies that outline the specific reforms and actions needed to scale up energy access, increase the use of renewables, and, crucially, attract private sector capital. The compacts also emphasize a holistic approach that includes off-grid and distributed renewable energy solutions, such as solar home systems and mini-grids, which are vital for reaching remote communities that are too costly to connect to the main grid. The initiative is also supported by the Dar es Salaam Energy Declaration, a unified roadmap endorsed by African leaders to accelerate the continent’s energy transition.

Despite its ambitious goals, the initiative faces scrutiny. Some critics, as highlighted by Germanwatch e.V., have expressed concern that the reliance on private investment could lead to a focus on profitable projects in urban and peri-urban areas, potentially neglecting the poorest and most vulnerable populations. They argue that the initiative must prioritize the social imperative of serving disadvantaged communities, even if it requires subsidies for connection costs and end-user prices.

Dr. Adesina’s “High 5s”: A Vision of Integrated Development

Adesina’s call to “Light up and Power Africa” is one of the five core strategic priorities that have defined his tenure at the AfDB. Known as the “High 5s,” these priorities are designed to provide a comprehensive and integrated framework for the continent’s transformation. The other four pillars are:

1. Feed Africa: Aimed at achieving food security and turning Africa into a net food exporter through agricultural transformation.
2. Industrialize Africa: Focused on diversifying economies away from raw commodity exports by developing industrial capacity and value chains.
3. Integrate Africa: Concentrated on breaking down barriers to trade and movement, building regional infrastructure, and creating a unified African market.
4. Improve the Quality of Life for the People of Africa: A broad goal encompassing investments in healthcare, education, water, and sanitation.

The energy crisis, therefore, is not an isolated problem but a central obstacle to achieving all of these goals. Without reliable power, it is impossible to run modern farms and food processing facilities, build competitive industries, or operate hospitals and schools effectively. Adesina’s legacy is rooted in the belief that these “High 5s” are intrinsically linked and that progress in one area is dependent on progress in all the others.

Mobilizing Capital and Overcoming Investment Barriers

The shift from an aid-based model to an investment-driven one is a cornerstone of Adesina’s philosophy. However, attracting the required billions in private capital is not a simple task. According to the Economic Commission for Africa (ECA), the continent’s electricity sector needs an annual investment of $90 billion until 2030, a figure that far outstrips the capacity of public funding alone.

A number of significant barriers have historically deterred private investors:

• Regulatory Complexity: Inconsistent and complex regulatory frameworks across different African countries create significant uncertainty for international investors. This includes variations in local laws, permitting processes, and compliance requirements.
• Political Risk: Perceptions of political instability, corruption, and a lack of respect for the rule of law often drive up the cost of capital, making African projects more expensive and riskier than those in other regions.
• Infrastructure Gaps: The lack of a robust and interconnected grid means that even when power is generated, it cannot be reliably transmitted to consumers. This requires substantial, and often separate, investments in transmission and distribution.
• Financial Market Underdevelopment: Many African countries have underdeveloped domestic capital markets, limiting access to local financing instruments and leading to a heavy reliance on foreign currency, which creates exchange rate risks.

To overcome these challenges, a concerted effort is needed to de-risk investment and create a more favorable environment. This includes implementing transparent and competitive tendering processes for new power generation capacity, offering policy and tax incentives for renewable energy projects, and strengthening the financial viability of power utilities. Furthermore, innovative financing models, such as blended finance that combines public and private capital, are crucial to bridge the gap and make projects more appealing to investors.

The Broader Sustainable Development Agenda

Adesina’s remarks at the Standard Chartered Bank summit extended beyond energy to the full spectrum of the UN Sustainable Development Goals (SDGs). He rightly pointed out that achieving the 2030 targets requires a massive scale-up of investment across multiple sectors, from digital connectivity and transportation to healthcare and education. The $1.3 trillion annual financing figure he cited is a testament to the immense scale of the challenge.

Energy access, or SDG 7, is a critical enabler for many of the other goals. It supports SDG 4 (Quality Education) by providing light for students and power for digital learning tools. It is essential for SDG 3 (Good Health and Well-Being) by allowing hospitals to refrigerate medicines, power surgical equipment, and operate modern diagnostic tools. And it is a foundational pillar for SDG 9 (Industry, Innovation, and Infrastructure), which aims to build resilient infrastructure and foster sustainable industrialization.

In his final months as President of the AfDB, Adesina’s powerful message serves as a reminder that the continent’s potential is vast, but it is not a foregone conclusion. It requires deliberate action, bold policy, and a collective commitment to mobilize the capital needed to power Africa’s future. The stakes are high, and the path forward is clear: to move beyond promises and into a new era of strategic, transformative investment.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

8th August, 2025