Nearly two out of every five people in Africa – around 600 million in total – still live without access to electricity. Electrification has barely kept pace with population growth, leaving the continent far behind the targets set by African governments and the international community. Progress in reducing the absolute number of people without access has stalled in recent years, with the rate of improvement failing to fully recover to pre-pandemic levels. Fewer than 19 million people gained access in both 2023 and 2024, compared with 23 million in 2019.

Even when connections are available, high costs often place electricity out of reach for low-income households. A cost-effective mix of grid expansion and decentralised solutions, such as mini-grids and stand-alone systems, offers a viable pathway to expand electricity accessibility. However, investment and financing remain significant barriers.

According to IEA tracking, less than USD 2.5 billion was committed for new electricity access connections in sub-Saharan Africa in 2023. This includes international public and private spending on a range of solutions, such as market support and ecosystem building. Following a pandemic-related dip in 2020, financial commitments rebounded in 2021, then grew steadily by 5% annually. Total commitments are now around one-quarter higher than they were in 2019. Roughly half of financing is for access via the grid, although decentralised solutions saw a 20% increase in their level of financing between 2019 and 2023. Yet although 80% of the population without access lives in rural areas, financing remains skewed towards urban areas. It is also geographically concentrated, with half of finance flows channelled to only six countries: Angola, Kenya, Mozambique, Nigeria, Senegal, and South Africa.

Private finance for electricity access accounted for less than 30% of total flows. It reached USD 640 million, compared with USD 1.8 billion in international public finance in 2023. Electricity access projects face tight profit margins, with limited household budgets preventing many from being commercially viable. As a result, public finance remains the cornerstone of the sector. Around USD 1 billion per year, on average, of this public finance (around 55%) is provided at concessional rates, although there has been a shift away from grants – the most concessional finance option – towards low-cost loans. This poses a challenge to the least-developed countries that struggle to take on more debt. While overall private finance levels remain low, impact investors’ interest in mature solar home systems and mini-grid companies contributed to an annual average growth of 16% in private finance flows between 2019 and 2023. However, most capital still comes from international sources, which can put smaller, African-owned companies at a disadvantage.

Availability of equity capital reached USD 580 million in 2023 but has been limited and highly variable, hindering the development and growth phases for developers. While equity investments have steadily increased since 2020, growth has been unevenly distributed, favouring mature companies in well-established markets. Smaller companies struggle to access risk-taking capital to fund their development stage, limiting the pipeline of bankable projects for debt lenders, who are more likely to finance ventures with reduced risk. This has proved particularly challenging for mini-grid developers, who face the greatest struggles raising debt. Only a few have successfully secured commercial loans or funding from development finance institutions.

National governments play a crucial role in financing electricity access, with earmarked funds in 23 sub-Saharan African countries accounting for 35% of their energy budgets in 2025. Public utilities are among the most indebted state-owned enterprises in sub-Saharan Africa, with low profit margins limiting their ability to deliver and sustain loss-making rural electrification programmes. Governments often allocate substantial resources to recapitalise utilities, absorb deficits and provide affordability support to consumers. This funding can be mobilised from a variety of sources, including domestic public revenues and international public finance. Across 23 countries in sub-Saharan Africa, government budget allocations for electricity access were estimated at USD 1.1 billion in 2024, rising to USD 1.9 billion in 2025. This signals the strategic importance of electricity access in national development priorities.

Under the Accelerating Clean Cooking and Electricity Services Scenario (ACCESS), nearly USD 150 billion in cumulative investment – USD 15 billion per year – is required to reach universal electricity access by 2035. This new scenario charts a pathway to achieve universal access to electricity based on the best rates of progress achieved historically. It is grounded in practical constraints and solutions, prioritising cost-effective and proven means to replicate past successes. Under this pathway, just under half of this investment (USD 7 billion annually) targets the expansion of grid networks, with around a third (USD 5 billion annually) going to mini-grids and just over 20% (USD 3 billion annually) to solar home systems.

Private investment accounts for slightly more than 45% of spending in the ACCESS pathway, supported by an improved enabling environment. Momentum is building to attract greater levels of private investment in grids across Africa. Countries such as Kenya, Mozambique, South Africa and Uganda are actively exploring ways to bring private investment into transmission lines. Burundi recently launched the continent’s first privately- owned distribution utility in more than a decade. At the same time, more countries are introducing comprehensive mini-grid regulations, as seen in countries with large mini-grid programmes such as Nigeria. These regulations reduce approval times and standardise tariffs, while benefitting from new tools including those developed by the African Forum for Utility Regulators. Meanwhile, VAT and import duty exemptions as well as the introduction of quality standards for solar home systems help developers ensure their solutions remain affordable and reliable for end-users.

Increased emphasis on productive users as anchor loads, especially for mini-grids, helps expand and stabilise revenue, making projects more commercially viable. Businesses consume nearly three times more energy per connection than households. Public institutions, such as schools or healthcare centres, can consume six times more – yet they represent, respectively, just 30% and 10% of total consumption by mini-grids today. Including demand stimulation programmes in electrification projects brings in productive users such as solar water pumps, cold storage, and small enterprises. Blended finance is already being used to fund these activities as with smallholder farmers in East Africa, CEI Africa’s Smart Outcomes Fund and the Zambia Energy Demand Stimulation Incentive programme.

In the ACCESS, equity financing increases roughly ten-fold to USD 5 billion per year, with debt financing seeing a five-fold increase to USD 7 billion annually. Given the need to scale up investment quickly, often involving high risk business models, equity plays a significant role in electricity access financing over the next decade. Patient equity, often provided by international public finance or philanthropies, is particularly important as providers have longer time-horizons for returns. This type of equity is in short supply, although the launch of the Zafiri fund under Mission 300 is a positive step, with an initial capitalisation of USD 300 million and the ambition to scale to USD 1 billion.

The rise in debt financing is driven mainly by a growth in private debt provision. Concessional loans from development finance institutions continue to play an important role, but local commercial banks and pension funds also become increasingly active, as already seen in Kenya, Lesotho and Nigeria. This increased involvement is facilitated by risk- mitigation tools from development partners. These include technical assistance, capacity building and blended finance facilities, such as the new Green for Access First Loss Facility.

Grants account for around USD 3 billion annually to 2035 to achieve the ACCESS pathway, although improvements to results-based financing are needed to maximise their impact. International public finance providers have shown a preference for delivering grant capital to developers via results-based financing. However, developers sometimes struggle with this funding since payments are not made upfront. This often forces companies to raise additional financing, and the complexity of application and due diligence processes can be prohibitive for smaller players. To ensure results-based financing continues to play a meaningful role, its design must evolve in collaboration with the private sector.

New and innovative financial mechanisms are emerging to tap into a broader range of investors for decentralised energy solutions, helping scale up investment. Mature solar home systems companies have started using securitisation deals to attract private investors while reducing the burden on company balance sheets. An example of this is Sun King’s USD 330 million deal in 2022 in Kenya. Meanwhile, innovations to support poorer households include the use of energy-as-a-service models that allow customers to pay for electricity based on availability or usage, rather than buying solar home systems outright. Green bonds are showing promise for mini-grid developers, which have larger upfront capital needs, in countries with clear regulations and deep capital markets, notably Nigeria. Finally, crowdfunding presents an opportunity to tap into the retail investor market, raising more than USD 300 million globally for electricity access since 2016.

Concessional resources account for roughly 40% of total investment – the equivalent of USD 6.2 billion each year – between now and 2035. This represents a nearly six-fold increase from the annual average between 2019 and 2023. Given the current macroeconomic challenges, mounting pressures on domestic budgets in African countries and recently announced cuts in development aid from major donors, it is imperative to adopt a more catalytic and strategic approach to the use of limited concessional funding. This includes focusing highly concessional resources on areas that cannot be serviced by the private sector, such as low-income and vulnerable communities, the early stages of project or company development, and technical assistance and capacity building.

Concessional funders can also target private sector mobilisation by prioritising higher risk- taking positions, encouraging innovative financing models, and providing risk-mitigation tools. International public finance providers can unlock private capital within blended finance structures by taking on more subordinated debt positions or contributing equity and grants. Concessional funds are also uniquely positioned to support innovative financing solutions. For example, aggregation could be used to more rapidly scale-up financing for smaller projects, with pilots currently in areas such as pooled procurement approaches and aggregated projects as part of securitisation deals.

Beyond connecting households to electricity, additional finance of at least USD 2 billion per year is necessary to ensure that basic levels of energy service are affordable. In many of the areas without electricity today, income levels are low, presenting a challenge to both households’ ability to benefit from new connection and the commercial viability of access projects. Electricity services are considered affordable if they account for less than 5% of household incomes. Based on new analysis, roughly 220 million people in Africa (40% of those without access) are unlikely to be able to afford the IEA’s basic bundle (around 50- 75 kWh per household per year). To fill this affordability gap would require additional spending of USD 2 billion per year, rising to USD 10 billion if we consider the higher levels of energy service seen under the essential bundle.

Providing developers with cheaper capital or additional grants to lower capital costs can improve affordability, but demand-side subsidies remain essential. The weighted average cost of capital for electricity access projects can be up to four times higher than transmission and distribution projects in advanced economies. This is due to a combination of higher country risk premiums, the smaller project sizes and the high risks associated with the end users. Bringing the cost of capital down to advanced economy levels would reduce project costs by up to 25%, making basic electricity services affordable for 40 million more people.

Providing grants to mini-grid developers can be an effective way to reduce the cost of electricity to consumers without disincentivising private investment. Given their capital- intensive nature, this has more of an impact on the affordability of services from mini-grids than on stand-alone systems. If grants were used to subsidise a further 30% of capital expenditure for mini-grids, this would make basic electricity services affordable to an additional 60 million people who would gain access via this technology. While these measures bring electricity access more within reach of a significant share of the population, this also highlights that targeted demand-side support remains necessary, particularly for the poorest households.

Targeted approaches are needed for communities living in informal settlements, fragile states, humanitarian contexts and Small Island Developing States. These complex environments account for a significant share of the population without electricity access. Around 60% of households without access are in fragile or conflict prone states, more than half of sub-Saharan Africa’s urban population live in informal settlements, and Africa is home to an estimated 40 million people in displacement settings. While the challenges in these settings vary significantly, commonalities include limited infrastructure, weak institutional capacity, and unstable economic conditions. Decentralised solutions often present the most viable pathway to electricity, but the higher risk levels limit investor appetite. Despite this, there are success stories: in refugee camps in Ethiopia and Kenya grants have been used to support private investment in solar home systems and mini-grids respectively. Blended finance has also been used to fund mini-grids in conflict-prone areas of the Democratic Republic of Congo and solar home systems in informal settings in Sierra Leone and Uganda.

Women play a pivotal role in advancing electricity access, but women-led businesses require tailored solutions to help overcome the additional barriers to accessing finance. Women-owned businesses can play a key role in the electricity access supply chain but lower engagement with the formal financial sector, lower literacy rates, and limited access to collateral mean they often struggle to raise capital. Further efforts are needed to identify and remove these barriers. Emerging examples that could be replicated include regulatory developments such as the creation of moveable collateral registries, or targeted products for women-owned businesses, such as dedicated funds, new credit assessment tools like cashflow based lending, or interest rate discounts for distributors that meet gender targets.

Achieving universal electricity access in Africa is an urgent priority requiring coordinated action and sustained investment alongside broader economic development programmes. While concessional capital is essential for the most underserved and complex environments, the examples outlined in this report show the potential for well-designed financial instruments to catalyse private sector involvement. There are some promising and inspiring initiatives, but progress must accelerate if Africa is to reach universal access by 2035. Financing remains a key enabler in the short to medium term, but it must be deployed in ways that support inclusive growth, local entrepreneurship, and stronger domestic financial markets. Over the longer term, the most sustainable path to universal access lies in increasing demand, making projects more commercially viable and reducing reliance on subsidies, while also supporting inclusive development across Africa.