Elsewedy Electric expands to Algeria with $2.5 billion deal

From the newsletter

Egyptian multinational Elsewedy Electric has announced plans to invest $2.5 billion in Algeria’s key sectors, including the electrical industry and renewable energy. The move follows the company’s completion of the $2.9 billion Julius Nyerere Hydropower Plant in Tanzania, signalling a fresh wave of African-to-African investment in big projects.

• Despite Africa's high energy deficit, only a few local companies have emerged to solve the problem. The main blocker has been a lack of access to capital. So far, only those with a proven business model and revenue have made it.

• This has slowed down the continent's progress in energy access, with the few companies being overwhelmed by financing demands, which in turn locks many people out of affordable access to energy.

More details

• Elsewedy Electric is a leading provider of energy, digital, and infrastructure solutions across the Middle East, Africa, and Asia. It generates multi-billion-dollar revenues and has earned multiple industry awards.

• A small group of African firms has expanded cross-border, diversifying portfolios to spread country and currency risk. Financing, however, remains the decisive bottleneck, particularly for large grid and utility-scale assets that require deep balance sheets and risk mitigation.

• Egyptian companies have been especially active in utility-scale projects. Elsewedy Electric, Infinity Power (a JV between Egypt’s Infinity and the UAE’s Masdar), Orascom Construction, and Hassan Allam Utilities are building a continent-wide footprint across utility-scale hydro, wind, and solar, as well as commercial and industrial (C&I) power and grid works. Infinity’s 2023 acquisition of Lekela Power created one of Africa’s largest renewable energy platforms, with 1.3 GW operating and a 16 GW development pipeline across multiple countries.

• The 2,115 MW Julius Nyerere Hydropower Plant in Tanzania stands out as one of the largest projects undertaken by an African company under a bilateral arrangement. And was built by Elsewedy in a joint venture with other Arab companies. Elsewedy is also leading the construction of the 60 MW Djermaya Solar project in Chad. In Burundi, Orascom Construction is delivering the 51 MW Jiji & Mulembwe hydropower plants.

• Egyptian firms aren’t alone. Kenya’s power producer, KenGen, is exporting geothermal expertise to Ethiopia, Djibouti, Eswatini, Zambia, and Tanzania, with more than 500 MW of projects expected to be built. CrossBoundary Energy, a Mauritius-based developer, has partnered with MIGA on a $495 million risk-sharing framework to de-risk 100+ distributed-energy projects across as many as 20 countries, improving bankability for C&I portfolios facing foreign exchange and convertibility risk.

• This is a positive development, but competition in renewables is intensifying, especially from well-funded foreign multinationals. Gulf-based companies such as ACWA Power, Masdar, and AMEA Power have dominated recent deals. Others, like Norway-based Scatec and France’s EDF, are delivering megaprojects that many local African firms cannot yet match. 

• Even for larger African players, more blended finance, credit guarantees, and regulatory clarity are needed. As these improve, more African firms can crowd in capital.

Our take

• African companies like Elsewedy face an uphill battle against well-funded foreign companies. Unless African governments deliberately create enabling environments, local companies risk being crowded out of their own markets.

• Elsewedy’s expansion in Algeria underlines a growing trend where African companies are beginning to invest across borders at scale. If this momentum builds, Africa could reduce its overreliance on foreign companies while deepening intra-African trade and technology transfer.

• But what's needed again to support the sector will be in training and skilling the young, innovative population to ready the workforce for the task ahead.