The majority of investments in 2024 were made by established producers such as Angola and Nigeria. Senegal is an example of how favorable policies for operators, political stability, and vast reserves can attract foreign investments. Africa possesses nearly 18,000 cubic kilometers of natural gas reserves, which are essential for a just energy transition.
110 milliard USD of investment planned in energy in Africa in 2024
To achieve Africa’s energy and climate goals by 2030, it will be necessary to invest more than 200 billion USD per year by the end of the decade. This will be essential to meet the growing energy needs of a continent, where the median age of the population is 20 years and where the average per capita GDP represents a bit more than a quarter of the global average.
The energy expenditure tracker estimates that around USD 110 billion should be invested in energy in Africa in 2024. Of which almost 70 billion USD for the supply of fossil fuels and electricity, the rest being destined for a series of clean energy technologies. Spending trends vary widely at
across Africa. However, neither the total amount nor the proportion spent on clean energy is sufficient to put the continent on track to achieve its sustainable development goals. At present, energy investments represent only 1.2 % of the region’s GDP and clean energy investments, although increasing, represent only 2% of the global total.
Overcoming the obstacle of debt repayment
Debt repayments have significantly increased in recent years. This means that many African governments struggle to access the necessary funds for capital-intensive clean energy projects. Additionally, low sovereign debt ratings further limit access to external investments. In 2023, only two countries, Botswana and Mauritius, were rated « investment grade ».
Among recent investments in clean energy, most focus on renewable energy production. While these projects are essential to sustainably meet Africa’s growing electricity needs, future growth prospects will be limited as long as the grid itself is not modernized and expanded. With average losses of 15 %, inefficient grids and insufficient interconnections already create bottlenecks for new renewable energy projects in the region.
High cost of capital : Major obstacle to investment projects
Access to energy is one of the main priorities in Africa, where 600 million people live without electricity and about 1 billion people lack access to clean cooking methods. The financing needs for energy access initiatives are well below the 25 billion USD annually required to achieve total access to modern energy by 2030. To make progress in this area, concessional donors will need to mobilize subsidies for the most vulnerable households and support project creation. Providing other risk reduction capital will also be essential to enable the private sector to play a more active role.
The high cost of capital is a major obstacle to increasing investments in clean energy in Africa. Reducing risks at the national level and for specific projects will require a major effort from national policymakers, based on clear strategies and ambitious Nationally Determined Contributions (NDCs), along with significantly increased international financial and technical support.
Oil and gas : 47 billion USD in investment in 2024
Africa’s energy resources potential necessitates crucial investment, and funders are in agreement : 47 billion is the expected investment expenditure for 2024 in the African oil and gas sector, representing a 23 % increase from the previous year. Even better, growth is projected to continue until the end of the decade.
This investment activity is an encouraging sign that major energy groups are strengthening their long-term interests in Africa. As detailed in the 2025 State of Energy in Africa report, the sector’s dynamics create unique opportunities for local communities, indigenous businesses, and national oil companies from other continents.
Emerging actors in the African energy sector
While the majority of investments in 2024 are made by established producers such as Angola and Nigeria, emerging players are active in the sector. For example, Senegal recorded its first offshore oil production this year. After five years of stagnation, Ghana is increasing its oil production by 10% and its gas production by 7 % in 2024.
Namibia, a major exploration site, also deserves special mention. The southern African nation aims to :
- Drill over 12 offshore wells next year
- Start production by 2029
- Become one of the top five African producers by the 2030s
An excellent achievement for a nation that discovered its massive reserves only in 2022. Namibia proves that a newcomer can attract significant foreign investment through smart and swift policy changes, preparing to disrupt the energy sector.
Increased energy exploration in Africa
An exciting question remains: where will the next Namibia be? Thanks to the resumption of exploration, another hotspot might be on the horizon. This year, 1,060 wells were drilled in Africa, the highest number since 2015. Africa has also become a global leader in high-impact well drilling, which has the potential to significantly increase overall reserves.
This strategy has already borne fruit. Among the notable discoveries planned for 2024 is the Mopane complex in Namibia, which contains approximately 10 billion barrels of oil. It is simply one of the largest offshore discoveries in the world, according to Offshore Magazine.
Even though global exploration as a whole remains stagnant, Africa intensifies its efforts to meet the growing demand for energy.
When exploration is successful, new fields follow. Investment expenditures in Africa are also expected to exceed those dedicated to existing fields by 10 % by 2030. These investment trends all demonstrate that investors are not limited to mature fields. Eyes are set on new sites, new facilities, and new opportunities in Africa.
Promising gas future for Africa
One of Africa’s economic opportunities is natural gas. Africa holds nearly 18 trillion cubic meters of reserves, which are essential for a just energy transition. Natural gas can significantly reduce emissions in the short term while promoting energy security and economic development. Global demand for this resource is also increasing, particularly in Asia.
In 2023, investment spending on natural gas was approximately 30 %, but it is expected to increase by 10 % by 2030. This is another sign that more and more investors are thinking about Africa in the long term and want to participate in a just energy transition.
In Senegal, the Greater Tortue Ahmeyim gas field will begin production next year. A final investment decision is also expected in 2024 for the Yakaar-Teranga project.This West African country is another fantastic example of how favorable policies for operators, political stability, and vast reserves can attract significant foreign investment.
All these initiatives allow Senegal to transition from being an oil importer to a gas exporter.
Mergers and acquisitions opportunities
Last year, the divestments of the major oil and gas companies increased significantly. International oil companies are aggressively rationalizing their African portfolios.
Generally, they sell mature assets, with high emissions and high costs. While significant divestments are often a sign of problems, they actually create promising changes for the African oil and gas sector.
On the one hand, countries in Asia and the Middle East are increasingly purchasing assets. Dubai, Qatar, the United Arab Emirates, Malaysia, and Chinese national oil companies
have acquired stakes in Egypt, Mozambique, Namibia, Kenya, and South Africa this year. As global energy demand increases, particularly in Asia, these countries are turning to Africa to find long-term solutions.
Foreign divestment is also an opportunity, as it creates opportunities for local companies. Thanks to a recent acquisition by Shell, Aradel Holdings has become the most valuable oil company in Nigeria. In Angola, IOC Afentra has acquired the assets of Azule (a BP and Eni joint venture) and plans to significantly increase the country’s overall production.
Selling assets and reinvesting in new operations
Major companies sell their mature assets and use the capital to invest in new fields and facilities. Foreign or local independent companies use the assets they acquire to grow without bearing the costs of building facilities from scratch. These smaller companies are also highly motivated to further develop and reduce emissions from these existing fields, representing both an environmental and financial gain for everyone.
The Angolan government clearly holds the same view, encouraging regional actors through fiscal incentives and a reduction in the State’s share of profits. It is fascinating to observe this upheaval in the sector in Nigeria and Angola, countries dominated for decades by the majors.
It’s no secret that Africa needs the big oil and gas groups to stay on the market. These majors exploit more than half of our exploration wells and hold a quarter of the continent’s production. However, an increasing number of local companies are developing and fully exploiting their strengths.
What is causing this increase in investment spending in Africa ?
Much credit goes to common-sense policy changes in countries like Namibia, Senegal, Mauritania, Egypt, and Angola. It is also worth noting that the COVID-19 pandemic slowed investment spending for several years, making a surge inevitable once the world reopened.
However, Capmad believes that the economic reality is largely responsible : global energy needs are rising. Africa has vast untapped resources. All parties must continue to build a flourishing energy industry that will enable Africa – and the world – to strengthen their autonomy in this sector.
Conclusion
International investments and collaborations are essential for advancing Africa’s energy infrastructure. Initiatives such as the Battery Energy Storage Systems Consortium and the UAE Declaration of Intent on hydrogen highlight the global commitment to support energy projects
renewable in Africa, to ensure energy security and to promote economic development.
Africa is not only the last frontier in terms of oil and gas, it has also become the preferred market for global investors. This is largely due to its unparalleled opportunities, its growing role as a global exporter, and its increasingly attractive tax conditions.As an industry, Africa expects to see increased investments and accelerated development of projects. Africa is not the only continent that needs its resources; the global markets will also need African energy in the medium and long term.
Sources :
http://www.afdb.org/en/news-keywords/energy-power
https://www.strategyand.pwc.com/a1/en/insights/africa-energy-review.html
https://energychamber.org/report/the-state-of-the-african-energy-2024-outlook-report/
