Green Energy in Africa Presents Significant Investment Opportunities

By César Augier, Hauke Engel, François Jurd de Girancourt, and Oliver Onyekweli

It is possible to address Africa’s large and growing energy needs while simultaneously transitioning to sustainable energy production on the continent.

Africa has the fastest-growing population in the world, and it is set to double by 2050 to reach more than two billion people.1 Meeting their needs with cost-efficient, sustainable energy sources will be vital to the continent’s socioeconomic development as well as to achieving the goals of the Paris Agreement.

In walking the line between ensuring local growth and addressing the urgent challenge of climate change, the continent has an opportunity to capitalize on its rich renewable-energy resources—notably its wealth of wind, sunshine, and water. A “just transition” of this nature also opens significant prospects for investors.

This article shares our perspective on the scale of the energy capital expenditure opportunity in Africa and the nature and geographic location of the required investments.

Electrification is critical to meet Africa’s energy needs

McKinsey has identified five potential scenarios for the global energy transition, which center around the pace of technological progress and the level of policy support.2 This article is premised on the Achieved Commitments scenario, which means the capital expenditure path described solves for both meeting the energy needs of the continent and achieving global greenhouse-gas-reduction targets. It is important to note that the Achieved Commitments scenario rests on two critical assumptions: that technological advancement will continue at a rapid pace and that enforceable policy measures that support the transition will be implemented.

Africa’s energy needs could double by 2050 as its population grows over the next three decades. At present, around 600 million Africans lack access to electricity (about half the total population), and this is expected to rise to 1.2 billion by 2050. Similarly, while 920 million Africans lack access to clean cooking,3 this could double to around 1.8 billion people in 30 years. Industrialization will also drive Africa’s energy demand, with the continent’s manufacturing output projected to grow by more than 6 percent each year until at least 2025.

The good news is that this growth in energy needs does not translate into a “one to one” growth in energy consumption: consumers can switch to more efficient technologies, that is, products that achieve the same outcome with less energy. For example, in mobility, industrial production, or cooking/heating, electrification can significantly lower energy demand.

If Africa shifts to more efficient and cleaner technologies over the next three decades, the increase in final energy consumption—the total energy consumed by end users in homes, industry, and agriculture—can be limited to a 50 percent increase by 2050. In this scenario, electricity consumption is required to grow by six times between 2019 and 2050 (Exhibit 1).

Exhibit 1
We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at:

Changing the mix in Africa’s energy production

To enable the electrification of Africa and reduce the carbon intensity of the energy supply, a change in the mix in energy production capacity is required.

Renewables will become more important in electricity generation, but only progressively: ramping up in 2030 to reach 65 percent of installed capacity by 2035 and around 95 percent by 2050 (Exhibit 2). As for renewables, solar and wind will grow much faster than hydropower, with around 70 percent of installed capacity coming from solar, 20 percent from wind, and 10 percent from hydro by 2050.



Leave a Reply

Inside The Energy Portal

Articles shared by The Energy Portal are designed to inform our readers and allow them to find a singular destination for alternative, renewable and green energy news.

Share The Energy Portal

Recent Posts

Sign up for our Newsletter