Africa is witnessing a significant shift in its energy landscape, with nations increasingly investing in renewable energy sources. This transition is driven by the need for cost-effective, reliable, and faster-to-deploy energy solutions, moving away from traditional coal and hydropower projects.
In a significant development, Zambia and China have signed a $1.5 billion energy agreement that encompasses solar, wind, and coal-fired power projects, each with a 300-megawatt capacity. While coal remains part of the mix, the focus on renewables highlights Africa’s growing commitment to sustainable energy solutions amid rising fuel costs and industrial demands.
Renewable Energy on the Rise
An analysis by Electron Intelligence reveals a promising future for renewables in Africa, with 322 energy projects announced for 2025. Among these, solar leads with 173 projects, followed by hydropower (46), wind (34), gas (22), and hybrid projects (14).
“Africa is not on the periphery of the global energy transition, it is sitting at its center,” stated Mugwe Manga, climate finance lead at FSD Kenya. He emphasized that the continent’s rich renewable resources are key to its energy transformation.
Olamide Niyi-Afuye, CEO of the Africa Minigrid Developers Association (AMDA), noted a strategic shift towards flexible, scalable energy systems. Solar energy, particularly within mini-grids, is playing an increasingly vital role.
According to the International Renewable Energy Agency, Africa set a record by adding 11.3 gigawatts of renewable capacity in 2025, tripling its previous year’s additions, with South Africa, Egypt, and Ethiopia leading this expansion.
Cost Efficiency Drives Adoption
The declining costs of renewable technologies are a critical factor. Since 2010, global utility-scale solar costs have plummeted by nearly 90%, and onshore wind costs have decreased by about 70%, positioning renewables as the most affordable new power source in many African markets.
“Renewable energy is now unequivocally the fastest, cheapest, and most bankable way to connect people, companies and economies to the megawatts they need to grow,” explained Matt Tilleard, CEO of CrossBoundary Energy.
Much of this growth is fueled by distributed solar and battery systems installed in industrial sites, telecom towers, and homes. Tilleard highlighted that conventional energy statistics often overlook these decentralized solutions.
Data from the Africa Solar Industry Association indicates that 23.4 gigawatts of solar projects were operational in Africa by the end of 2025. However, Chinese export records suggest a much higher adoption rate, with 58.1 gigawatts of solar panels shipped to the continent since 2017.
Renewables Offer Quick Returns
Investors are drawn to renewable projects due to their rapid returns and reduced vulnerability to global fuel price fluctuations. “Solar and wind projects are especially attractive at this moment because they combine strong commercial fundamentals with relatively lower investment risk,” Niyi-Afuye noted.
At the Kamoa-Kakula copper complex in the Democratic Republic of Congo, CrossBoundary Energy’s 233-megawatt solar and battery project is nearly complete within a year, highlighting the speed of renewable deployments compared to traditional coal or hydropower projects.
Policy Support and Challenges
Policy changes are accelerating the renewable transition. Ethiopia’s ban on internal combustion engine vehicles and South Africa’s easing of restrictions on private power generation are paving the way for increased industrial renewable projects.
Nevertheless, challenges persist, such as the financial instability of many African utilities and the high costs of financing renewable projects, which are significantly higher than in developed economies. Development finance institutions are playing a crucial role in bridging this gap with various financial support mechanisms.
“What remains is not a question of technology or cost,” Manga emphasized. “It is a question of finance, political will and preparing bankable projects that will drive demand for power on the continent.”
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Original Story at wtop.com