Research Note: Financing Africa’s Energy Transition through the Public Markets

Public markets offer access to the deep pools of capital needed to finance Africa’s renewable energy transition.

MOBILIST-sponsored technical assistance, in collaboration with Revego Fund Managers and delivered by Wood Mackenzie, shows that the total addressable market for sub-Saharan Africa’s (SSA) renewable energy transition could reach US $193 billion over the period 2023-2031, with indicative internal rates of return for new built utility-scale assets in the region of 15-21%.

Cumulative renewable energy investment into Sub-Saharan Africa since 2010 reached just US $37 billion, about 12-15% of the total financing needed for the continent’s energy transition. This MOBILIST Research Note summarises the findings of Wood Mackenzie’s research, highlighting the role public markets could play in meeting this financing need.

To date, secondary market farm-downs for renewable energy assets in SSA have been relatively scarce due to the balance of risks on the continent. Listed fund structures could facilitate capital recycling and attract institutional investors seeking predictable income. A robust secondary market could increase the volume of capital available and ultimately accelerate deployment through ‘farm downs’ of de-risked assets.

Development finance actors have critical roles to play in building secondary markets to help finance SSA’s energy transition as originators, investors, pioneers, and providers of hedging solutions and technical support.

Click here to download the Executive Summary of the original Wood MacKenzie research report.