Morocco gets more than 70% of May investments

From the newsletter

Energy projects in Africa received $17.6 billion in funding during May. Morocco dominated, mainly thanks to $14 billion from a public-private partnership deal with the UAE for its power and water sector. Proximity to Europe and low labour costs have made it a prime destination for investments. New manufacturing plants include Africa's first wind blade factory.

• The deal will include the construction of 3,000 MW of high-voltage direct current transmission lines and 1,200 MW of renewable energy projects. The electricity generated will be sold to Morocco’s national power utility company ONEE.

• Renewables rising funding database shows the country has received at least $15.6 billion in funding, triple that of second-placed South Africa. In May, it also had a loan of $327 million with the EIB for energy infrastructure approved.

More details

• In May, Africa saw 25 funding deals and commitments across at least 14 countries, totalling $17.6 billion. North Africa led with $14.1 billion, followed by West Africa with $1.9 billion. A significant portion of these funds was directed towards Morocco and Nigeria. East Africa secured $615 million, while Southern Africa received $603 million.

• The investment landscape across African countries and regions is highly dynamic, shaped by national policies, regulations, and overall investment risk profiles. Countries that have proactively streamlined their markets, such as Egypt, Morocco, and South Africa, continue to attract substantial capital. 

• Nigeria, the second-largest recipient of May's funding, received a significant boost from the Nigerian Capital Development Fund (NCDF), which plans a $1 billion investment to accelerate inclusive economic growth and sustainable development. The Nigerian Climate Investment Platform (NCIP) is also set to support green technology initiatives with a $500 million fund.

• Beyond these large-scale commitments, energy companies in Nigeria also secured deals. Sunking got an $80 million loan from IFC and Stanbic IBTC Bank to support its solar expansion efforts. Energy startup Arnergy raised $18 million in Series B funding for its solar home systems expansion, and mini-grid provider Husk Power Systems secured $5 million.

• Ethiopia, historically known for its more restrictive policies, is now opening up. Its affordable and reliable power, the lowest in Africa at just 0$0.006 per unit, is proving highly attractive to manufacturing industries.

• Ethiopia has already brought a 2,000 MW capacity solar cell manufacturing facility into operation. Chinese investment is also making inroads, with a recent $360 million commitment for a solar cell manufacturing plant and an additional $250 million for solar energy project development in Ethiopia.

• The growing need for grid infrastructure is gaining significant attention from funders. Mozambique, Morocco, and Zambia have all secured funding to bolster their energy infrastructure. Specifically, Mozambique is building lines to connect with the Southern African Power Pool, while Zambia is constructing an interconnector with Tanzania, and Mauritania is developing a connection to Morocco. This trend shows a growing interest among African countries in exploring export and import markets for electricity.

• Private equity investment funds are also increasingly active in the sector. The Emerging Africa and Asia Investment Fund (EAAIF) raised $325 million to support the power sector in Africa. Furthermore, Inspired Evolution's Evolution III Fund closed at $238 million in March 2025 for energy transition investments in Africa. 

• While the sector still faces a reliance on development finance and a comparatively lower level of funding from commercial banks, some, particularly in Southern Africa, are stepping up, with notable players including Standard Bank and Rand Merchant Bank.

Our take

• The focus on connecting 300 million people in Africa to electricity is set to get more funding for solar home systems. Major commitments from the AfDB and the World Bank under initiatives like "Mission 300" are expected to catalyse substantial private sector investment in this area. Countries with the largest unelectrified populations, notably Nigeria and the DR Congo, are anticipated to lead these efforts.

• Recent policy changes across many African nations, which are aligning and streamlining investment in the renewables sector, are creating a more favourable environment for private sector growth and accelerating electrification.

• Despite the increase in funding compared to April, investment remains concentrated in a few countries that have already achieved greater electrification success. There is a clear need to direct more investment towards less-electrified nations. However, unless their governments proactively streamline policies and reduce perceived risks, investors will naturally gravitate towards opportunities with greater certainty and lower risk.