Africa must urgently scale annual power investments to prevent a severe energy crisis by 2050, the Africa Finance Corporation (AFC) stated in its newly released “State of Africa’s Infrastructure Report 2025.”
The continent needs to add at least 16 gigawatts (GW) of grid-connected electricity generation every year and invest between $3.2 billion and $4.3 billion annually through 2040 solely to expand and modernize transmission networks.
These investments represent the minimum required to achieve a modest benchmark of 0.300 megawatts per thousand people, essential for basic development amidst rapid population and economic growth, the AFC emphasized.
The report identifies significant potential in solar photovoltaics, gas-to-power, hydropower, battery storage, and grid modernization, asserting that with the right investments and reforms, Africa could build a dynamic and integrated future-ready energy system. Highlighting a viable model, the AFC urged African nations to emulate Latin America, particularly Brazil’s success in liberalizing its power transmission sector since the 1990s.
Through competitive auctions and independent power transmission models, Brazil expanded its grid from 105,000 km in 2012 to 184,000 km in 2023, attracting $3.65 billion in private investment in a single 2024 auction – roughly equivalent to Africa’s entire annual transmission funding need.
“Brazil’s experience demonstrates that creating a viable investment pipeline, anchored in regulatory reform, unbundled utilities, and long-term planning, is essential to crowd in private capital at scale,” the AFC stated.
For Ghana, facing persistent reliability issues including periodic blackouts, high system losses, and an energy sector debt estimated at $3.1 billion, the AFC’s findings are critically relevant. Despite installed generation capacity exceeding current peak demand, transmission and distribution constraints severely limit electricity delivery and efficiency.
The AFC recommends Ghana adopt key reforms: opening power transmission to private investment via transparent auctions, unbundling state-owned utilities to improve accountability, creating bankable long-term infrastructure plans, and diversifying energy sources with a focus on decentralized and smart grid solutions.
Implementing these measures could position Ghana not only to meet domestic demand but also to become a power-exporting hub within the West African Power Pool.
The scale of investment required underscores the continent’s pivotal challenge in transforming its energy landscape to sustain growth and development through mid-century.
