Around 600 million people in Africa still lack electricity, mostly in rural areas where extending the main grid is costly and slow. The IEA’s new report, ‘Financing Electricity Access in Africa’, highlights that achieving universal access by 2035 will require roughly $15 billion per year in investment, significantly more than current funding levels.
Key takeaways for AMP:
- Decentralized solutions are essential: Minigrids and solar home systems are critical to provide electricity in remote communities where the grid cannot reach.
- Private investment must grow: Currently, private finance makes up less than a third of total funding. To reach universal access, around 45% of future investment will need to come from the private sector, supported by smart policies and regulatory frameworks.
- Public finance and concessional tools remain vital: Grants and concessional financing help reduce risk for private investors and make energy services affordable for low-income communities.
- Targeted strategies for inclusion: Special attention is needed for rural areas, informal settlements, fragile states, and humanitarian contexts, which are often underserved.
- Affordability is a key challenge: Roughly 220 million people cannot currently afford basic energy services, highlighting the need for concessional support and well-designed subsidies to make minigrid projects commercially viable.
By combining these approaches, AMP can leverage the report’s insights to scale decentralized electricity solutions in a way that is inclusive, sustainable, and investment-ready.