Approximately €11.7 billion (roughly $12.6 billion USD) was invested in Africa’s energy transition in 2025, according to a new report. The findings, detailed in the “Africa’s Power and Energy Transition Investment Report 2025” released on February 17th by Electron Intelligence, reveal a strong focus on clean energy projects. The vast majority – 98.3% – of this investment was directed towards clean energy initiatives, including solar, wind, hydro, and lower-carbon gas projects.
Investment in energy production facilities accounted for around €6.9 billion ($7.4 billion USD), representing three times the amount allocated to electricity sector reforms and public utility enhancements, which totaled €2 billion ($2.1 billion USD). Investments in transmission and distribution networks reached €1.3 billion ($1.4 billion USD), even as funding for energy storage and flexibility solutions remained relatively modest at €564 million ($604 million USD).
Debt Financing Dominates Investment Landscape
Electron Intelligence highlighted that debt financing was the primary source of funding for these projects. Debt instruments accounted for €7.6 billion ($8.1 billion USD) of the total, significantly outpacing equity investments at €2.1 billion ($2.2 billion USD). Grants contributed €991 million ($1.1 billion USD), while guarantees and blended finance reached €556.5 million ($596 million USD) and €387 million ($415 million USD) respectively.
The report, based on analysis of 306 transactions completed in 2025, indicated that investors prioritized project bankability over portfolio size. Capital flowed towards deals with clear power purchase agreements, well-defined risk-sharing structures, and a high degree of operational readiness, particularly those utilizing platform or programmatic approaches to mitigate implementation challenges.
“In Africa, the story of investment in 2025 wasn’t about who announced the most capacity, but about who knew how to structure genuinely bankable deals,” explained Joseph Ibeh, Managing Director of Electron Intelligence.
Development finance institutions led the way in providing funds. The African Development Bank (AfDB) was the largest investor with €1.5 billion ($1.6 billion USD), followed by the World Bank Group (€881 million / $944 million USD), South Africa’s Standard Bank (€661 million / $708 million USD), and the European Union (€673 million / $722 million USD). Ten markets captured €8.3 billion ($8.9 billion USD), representing 73% of the total investment. South Africa (€1.8 billion / $1.9 billion USD), Egypt (€1.6 billion / $1.7 billion USD), Nigeria (€1.5 billion / $1.6 billion USD), and Morocco (€1.1 billion / $1.2 billion USD) were the leading recipients, alongside other countries offering significant projects and relatively stable regulatory frameworks.
Investment Still Lags Continent’s Potential
Despite the increase, these figures remain significantly below the continent’s energy needs, with over 600 million people still lacking access to reliable electricity. The €11.7 billion ($12.6 billion USD) invested in Africa represents just 0.6% of the €1,949 billion ($2.1 trillion USD) invested globally in energy transition initiatives in 2025, according to BloombergNEF. This illustrates a multi-speed transition, with industrialized economies absorbing the bulk of capital to decarbonize established systems, while African nations struggle to finance basic infrastructure despite their substantial solar and wind potential.
Analysts suggest that while the emphasis on bankability highlighted in the report benefits investors, it could potentially overlook countries with significant needs for mini-grids, decentralized solar solutions, and rural electrification. Without public guarantees, stable regulatory frameworks, and institutional capacity, these solutions continue to attract relatively limited investment, despite their potential for creating local jobs in construction, operation, and maintenance.
