Policy Tracker: Nine African countries change direction

From the newsletter

Every month, the Renewables Rising policy tracker collects key changes in policies and regulations in the African energy sector. Over the past month, nine African countries introduced new regulations aimed at reshaping the energy landscape. The changes focused on integrating renewables, energy efficiency, and market liberalisation.

• In southern Africa, Zambia made a move to accelerate its renewable energy transition by dramatically cutting the approval timeline for solar energy projects from over six months to just 48 hours. 

• Meanwhile, in West Africa, Ghana has moved to a competitive procurement process for solar power generation. It aims to attract investors, expand renewable energy capacity, and ensure competitive pricing for consumers.

More details

• In North Africa, Mauritania is privatising its power generation sector. The country aims to achieve universal electrification by 2030, a significant leap from the current 57%, with the private sector expected to lead this expansion. Already, 550 MW of gas-fired capacity is under development by Independent Power Producers (IPPs), with further plans for renewables and a focus on hydrogen exports.

• West African nations are also making significant progress in energy governance and market structuring. Nigeria has approved a National Integrated Electricity Policy. This ambitious policy is designed to unlock over $122 billion in investments by 2045. It seeks to diversify energy sources beyond traditional hydropower and gas, enhance transmission capacity, and address critical sector challenges to build a more stable and sustainable energy infrastructure.

• In East Africa, Kenya has outlined ambitious targets in its Second Nationally Determined Contribution (2031–2035). The country is committing to a 35% reduction in greenhouse gas emissions and a pathway towards 100% renewable electricity generation by 2035. It has also gazetted the Integrated National Energy Plan (INEP) Regulations, which support decarbonisation, decentralisation, and digitalisation of the energy sector.

• However, Kenya's proposed Finance Bill 2025 introduces measures that could potentially impact the growth of renewables and clean energy technologies. The proposals include introducing VAT on specialised solar photovoltaic modules/panels, charge controllers, inverters, and deep cycle batteries, removing existing exemptions. The bill also suggests introducing VAT on goods for geothermal, oil, or mining exploration, potentially increasing the cost of new resource development.

• In Southern Africa, South Africa is undergoing significant regulatory shifts to address its energy challenges. The Department of Trade, Industry and Competition is reviewing import duties on 82 categories of renewable energy components. 

• The government also announced further regulatory reforms for electricity distribution and wheeling. These reforms address Eskom's grid monopoly by allowing private entities to generate and wheel power across national and municipal networks. These changes are expected to stimulate green energy investment, promote competition, and provide non-discriminatory grid access.

• Zimbabwe has introduced a National Energy Efficiency Policy to significantly reduce energy intensity by 2030. This comprehensive policy promotes efficiency across various sectors, establishes robust data systems, encourages Energy Service Companies (ESCOs), and supports local energy-efficient technologies. 

Our take

• These changes present a mix of both challenges and opportunities for investors as they come into effect. Ghana, Mauritania, Nigeria, and Zambia are introducing some of the most positive developments for the energy sector.

• However, South Africa's policy shifts, intended to support local manufacturing and lessen reliance on foreign supply chains, could have unintended consequences. The proposed changes might significantly increase costs for solar and wind projects, potentially slowing down the rapid deployment needed for energy security.

• Many African countries face a difficult balancing act: protecting local manufacturing while still allowing imports. This often ends up stifling the sector, as local technology and production struggle to scale up, achieve economies of scale, or compete effectively with cheaper imported goods.