The end of Power Africa: A turning point for continent’s energy

The recent closure of Power Africa, a US initiative aimed at boosting electricity access in Africa, signals a shift in US foreign policy, moving away from large-scale aid projects towards strategic competition and private-sector investment. This decision, driven by budgetary constraints and changing priorities, has significant implications for Africa’s energy landscape.

Power Africa, launched in 2013, was instrumental in mobilising private sector investment through blended financing models, de-risking energy projects, and attracting long-term investors. It also accelerated renewable energy adoption, particularly in off-grid areas, addressing critical infrastructure gaps. However, its termination raises concerns about the sustainability of these gains, leaving many midstream projects in limbo.

African nations can learn from Power Africa’s successes by strengthening regulatory frameworks, creating local financial instruments, and fostering public-private partnerships. Regional cooperation in power pooling and cross-border energy trade is also crucial for building a self-sustaining energy ecosystem.

For millions, Power Africa represented a pathway to modernisation. Its withdrawal threatens to slow electrification efforts, especially in countries deeply reliant on its support. The private sector faces increased uncertainty as Power Africa’s risk mitigation strategies are no longer available. Investors may hesitate due to regulatory inconsistencies and currency volatility, exacerbating the continent’s infrastructure financing gap.

Geopolitically, the shutdown creates opportunities for other global players, notably China, Russia, and the Gulf states, to expand their influence. While these partnerships offer potential benefits, they often come with strategic and political conditions, risking further dependency.

Relying on external actors is not a sustainable solution. Africa must build internal capacity and self-sufficiency. This includes developing robust policy frameworks, enhancing regional cooperation through initiatives like WAPP and SAPP, and leveraging alternative financing mechanisms. Establishing regional energy financing mechanisms, such as pooled infrastructure funds, can attract local investment.

Governments should incentivise local energy entrepreneurs through tax incentives and risk-sharing mechanisms, expanding access to credit for SMEs in the renewable energy sector. Tapping into sovereign wealth funds, green bonds, and diaspora investments can further diversify financing sources.

The end of Power Africa is an opportunity for Africa to rethink its energy strategy. By prioritising homegrown solutions, regional cooperation, and sustainable financing, African nations can build a resilient, self-sustaining energy future and move beyond dependency on foreign aid. The continent must drive its own energy transformation, ensuring lasting electrification and independence.

Abiodun is an analyst at SBM Intelligence