Capital is flowing into African energy markets, projects are advancing, and governments are signalling reform. Yet risk remains stubbornly high, unevenly distributed, and in several cases structurally unresolved.
Nigeria sits at the centre of this tension. Local investors have stepped up their exposure to upstream oil and gas assets, encouraged by regulatory adjustments and asset divestments by international majors. At the same time, mini-grids and commercial and industrial power projects continue to expand, driven by chronic grid unreliability and demand from businesses that can no longer wait for state supply to stabilise.
Even so, the broader Nigerian energy landscape remains difficult for most investors. Policy reversals, foreign exchange constraints, fuel pricing uncertainty and persistent infrastructure failures continue to weigh on long-term confidence. Authorities enter 2026 once again promising to address problems that have proven resistant to repeated reform cycles.
Egypt offers a sharper contrast. Power coverage in the issue highlights a power purchase agreement signed between Scatec and the Egyptian Electricity Transmission Company for what Scatec describes as the largest combined solar and battery energy storage project on the continent. The deal reinforces Egypt’s position as one of Africa’s more bankable power markets, where clear offtake structures and state-backed counterparties continue to attract large-scale renewable investment.
Elsewhere, smaller markets are quietly reshaping their energy mix. In Eswatini, a country heavily dependent on electricity imports, new domestic generation is taking shape through its first grid-connected solar independent power producer, a large biomass project, and proposals for new coal-fired capacity. The strategy reflects a pragmatic push for supply security rather than an ideological energy transition.
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Hydropower receives renewed attention across the continent. Despite growing concerns over rainfall variability linked to climate change, hydroelectric power remains attractive to long-term offtakers. Project developers and utilities continue to point to strong output projections over asset lifetimes, particularly for well-sited basins with diversified inflows.
Transmission infrastructure is emerging as a decisive bottleneck. Kenya has formalised a public-private partnership for its first independent transmission project, while South Africa has announced seven prequalified bidders for its own inaugural ITP capacity. These moves signal a recognition that generation capacity alone will not stabilise power systems without parallel investment in grids.
Regional integration also features prominently. A major interconnector linking Guinea and Mali has secured additional funding from the African Development Bank, underlining the continued role of cross-border infrastructure in balancing supply and demand.
In Southern Africa, the issue tracks the regional consequences of Mozambique’s Mozal aluminium smelter being mothballed and examines South Africa’s growing sensitivity to Mozambican gas supply as onshore production tightens and replacement options remain limited.
Oil and gas coverage turns east. Kenya has approved the Lokichar field development plan, while Uganda advances discussions on financing the Kabaale refinery. First oil from Tilenga and Kingfisher is expected this year, with the East African Crude Oil Pipeline now more than 80 percent complete.
The issue closes with a pointed question. Africa does not lack energy resources or projects. What remains unresolved is whether credible electricity market creation can finally attract private capital at scale. Until that question is answered, progress will continue, but risk will remain the defining feature of the sector.
By Thuita Gatero, Managing Editor, Africa Digest News. He specializes in conversations around data centers, AI, cloud infrastructure, and energy.
