Rethinking Energy Transition Finance in Africa: Towards a Regional Market and Policy Framework

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ABSTRACT

Rethinking Energy Transition Finance in Africa: Towards a Regional Market and Policy Framework

Desmond Ogba*

Africa, as a continent, faces a challenge of energy poverty in large part due to existence of enormous and yet untapped renewable energy resources. Admittedly, the continent has made significant progress in transitioning towards cleaner and more sustainable energy systems. However, due to enormous financial investment needed, energy transition has moved at a rate that is significantly lower than what is required. This paper argues that the challenge associated with energy transition financing in Africa is the high cost of renewable energy projects, which is further exacerbated by the fragmented, project-by-project financing model currently employed on the continent. The objective of this paper is to conceptualise a sui generis mechanism that has the potential to serve as an effective financing vehicle for large-scale, sustainable energy transition projects in Africa.

In order to achieve this objective, this paper employs a doctrinal methodology that is informed by examining applicable legal frameworks, policy instruments, and existing literature on the subject of energy transition financing. The paper examines existing financing models driving Africa’s energy transition projects, ascertains structural limitations in these models, and assesses their effectiveness in driving Africa’s energy transition projects. The paper concludes by proposing a regional financing architecture that will blend public and private capital, deploy sophisticated risk mitigation instruments, and proactively build the market infrastructure needed to attract investment at scale. It posits that in order for Africa to unlock its renewable energy potential, it is not only necessary to increase funding pledges for renewable energy projects, but also to re-engineer and restructure Africa’s capital mobilization.

Keywords: Energy transition, renewable energy, energy financing, Africa.

INTRODUCTION
The African continent is a region which is endowed with unparalleled renewable energy resources, yet it simultaneously suffers from the world’s most severe and widespread energy poverty.₁ This systemic failure stems from failures in financial architecture, market design, and political coordination. Africa is home to 60% of the world’s best solar resources and possesses vast, largely untapped potential in wind, hydropower, and geothermal energy. The continent’s theoretical renewable energy potential is estimated to be a staggering 1,000 times larger than its projected

* LLB (Ebonyi State University); BL (Nigerian Law School); LLM (Harvard Law School).

1. International Renewable Energy Agency (IRENA), The Renewable Energy Transition in Africa: Powering Access, Resilience and Prosperity (Report, 2021)  accessed 24 October 2025.

THE GRAVITAS REVIEW OF BUSINESS & PROPERTY LAW Vol.16 No.14