Africa needs to add around 26 GW of new power capacity annually through 2030, but current additions are only about 1/3rd of that level
Renewable IPPs, mainly solar and wind projects, are emerging as the main scalable solution as public finances remain constrained
The report calls for stronger auctions, bankable contracts, grid investment and greater private-sector participation to accelerate electricity access and clean energy deployment
The report says private capital will be essential because governments and utilities cannot finance expansion alone
Renewable independent power producers (IPPs) are emerging as the most practical way to expand electricity generation across Africa as the continent struggles to meet rising power demand and access goals, according to a new discussion paper by GET.transform and the Power Futures Lab.
Africa faces a major electricity investment gap as demand for power rises rapidly due to population growth, economic expansion, and electrification efforts. Electricity demand is projected to increase by 40% to 50% by 2030, reaching nearly 1,200 TWh, and could double by 2040 to around 2,400 TWh, while hundreds of millions of people across the continent still lack access to electricity.
The report says Africa needs to add around 26 GW of new power generation capacity every year through 2030, but current additions are only about 1/3rd of that level.
Under a least-cost pathway aligned with the United Nations Sustainable Development Goal 7 (SDG7), Africa would need to add 182 GW of new generation capacity between 2023 and 2030. About 88% of this capacity is expected to come from solar and wind energy. However, historical progress has been much slower. Africa has added only around 7-8 GW of generation capacity annually in recent years, while Sub-Saharan Africa, excluding South Africa, has averaged just 2-3 GW per year.
At the current pace, Africa is expanding power generation capacity at only a fraction of what is required, according to the analysts. Most of the new capacity additions are still driven by the public sector, focused on fossil-fuel-based projects.
Building on earlier work by GET.transform and Power Futures Lab on competitive renewable energy procurement, the paper also examines where investment in Africa’s power sector is flowing and highlights a significant financing gap.
The African Development Bank (AfDB) estimates that Africa will require about $64 billion in annual investment through 2030 to meet generation needs and minimum transmission and distribution expansion requirements. By comparison, actual investment commitments in African power systems averaged around $35 billion annually between 2014 and 2020. This leaves an estimated funding shortfall of $25-30 billion per year, even before accounting for wider grid upgrades and last-mile electricity access costs.
Researchers say public financing alone cannot meet the continent’s growing energy needs because many governments face fiscal constraints and utilities remain financially weak. As a result, the report describes private renewable investment as 'the primary scalable pathway' for expanding electricity generation across Africa at the scale and speed required.
The paper notes that countries with competitive renewable procurement systems, bankable power purchase agreements, and stronger grid infrastructure have attracted more investment. It highlights South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) and Morocco’s renewable energy auctions as examples of successful large-scale deployment.
Outside South Africa and North Africa, renewable IPPs are already responsible for most new generation capacity additions in many Sub-Saharan African countries, particularly through solar PV and wind projects. However, the report says overall project volumes remain too small, with many countries adding less than 200 MW annually.
European and African companies currently dominate financing, project development, and engineering roles in renewable IPP projects across the region, while manufacturing of solar and battery technologies is increasingly concentrated in Asia. The report says this creates opportunities for African-European partnerships across the clean energy value chain.
The study calls for expanded competitive auctions, improved contract bankability, stronger grid infrastructure, and greater support from development finance institutions to attract more private capital into renewable energy projects.
Analysts argue that development finance institutions (DFI) instruments should mobilize (rather than crowd out) private capital. There is a strong need to support early-stage project development and to invest in grid readiness to ensure projects can be deployed effectively.
It also recommends focusing public finance on transmission, distribution, and grid upgrades, while private investment can be used to scale generation capacity. The report concludes that accelerating the deployment of renewable IPPs will be critical to improving electricity access, supporting economic growth, and advancing Africa’s low-carbon energy transition.
The discussion paper titled Africa’s Power Investment Landscape | Why Scaling Renewable IPPs is Essential is available for free download on the GET.transform website.