Energy
Overcoming Africa's power transmission investment gap
Experts debate whether Africa's electricity transmission shortfall stems from a lack of capital or a shortage of bankable projects.
Key points
- Africa needs an estimated $80 billion in transmission investments by 2040.
- Experts highlight a shortage of projects with clear commercial and financial viability.
- Non-cost-reflective tariffs and early-stage risk remain major hurdles for utilities.
Africa faces a pressing challenge in expanding its electricity grids to match rapid generation growth, according to discussions reported by ESI Africa.
During a recent webinar on transmission finance, panelists examined why generation projects, such as solar installations reaching 4.5 gigawatts in 2025, are outpacing the infrastructure required to transport the power. More than 600 million people across the continent still lack reliable electricity access.
Tilana de Meillon, Transmission Lead at the International Finance Corporation, argued that capital is not the primary constraint. Instead, she noted that the continent suffers from a shortage of projects equipped to attract lender confidence. Tshegofatso Neeuwfan, Country Director at the Global Energy Alliance, countered that utilities frequently struggle to secure the funds necessary to execute established master plans.
Bridging the preparation divide
According to the reporting, many national plans identify where demand and generation will grow, but fail to bridge the gap between a conceptual route and an asset that financial institutions can underwrite. Feasibility studies often demonstrate broad economic advantages without adequately addressing revenue mechanisms, leaving lenders uncertain about how returns will be generated.
Unlike independent power producers that handle their own site selection and initial proposals, transmission lines originate from national master plans. This leaves early-stage development risks with governments and state utilities. While some institutions argue that utilities struggle with delivery, examples such as Uganda implementing approximately 70 percent of its previous master plan demonstrate that national operators can successfully execute infrastructure strategies when proper frameworks exist.
Furthermore, non-cost-reflective tariffs continue to undermine the financial health of utilities, limiting their ability to fund early project preparation and construction. With traditional concessional loans and grants under pressure from competing public priorities like healthcare and education, attracting commercial capital has become essential.
Why it matters
Robust transmission networks serve as the backbone of energy security and economic expansion across the region. Initiatives such as the World Bank and African Development Bank's Mission 300 aim to connect 300 million people by 2030, having already reported over 50 million connections. However, these access targets cannot be met if power generated from new installations remains stranded due to inadequate grid capacity.
For investors and policymakers in Nigeria and across Africa, unlocking the estimated $80 billion required for transmission by 2040 depends on rigorous project preparation. Shifting the focus of feasibility studies toward clear revenue models and commercial viability will be vital to reassuring lenders and accelerating grid development across the continent.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
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Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
