Africa stands at a key moment in its energy evolution. With immense renewable potential and increasing international investment interest, the continent has the potential to shape the future of global energy. The Africa Energy Report 2025 by S-RM Intelligence and Risk Consulting explores the landscape across four key dimensions: infrastructure development, green hydrogen, oil’s role in a just transition, and mining’s place in the broader energy shift.
Bridging the infrastructure gap
Despite Africa’s abundance of solar, wind, hydropower and geothermal resources, amounting to 60% of global potential, actual energy generation remains low. Africa holds 40% of global solar potential but contributes less than 1% to global output. The bottleneck lies not just in generation but in the lack of infrastructure for transmission and storage.
Unreliable electricity supply hinders economic growth, affecting sectors from technology to manufacturing. Although announcements like the $4,5 billion COP28 commitment to clean power offer hope, the continent needs around £50 billion annually to reach universal electrification by 2050. Market liberalisation is crucial. Countries like South Africa, Namibia, Kenya and Morocco have begun regulatory reforms, attracting development finance institutions and private capital.
Battery energy storage systems (BESS) are key to solving intermittency issues tied to renewables. Projects like South Africa’s Kenhardt BESS (225 MW) are leading the way, with similar efforts underway in Senegal and Mozambique. However, costs, logistics and supply chain dependencies are major hurdles, especially for lithium-ion batteries. The BESS Consortium, involving countries such as Egypt, Ghana and Nigeria, aims for 5 GW of storage by 2025, but progress is slow.
The environmental and social impacts of battery production and disposal present further challenges. Africa lacks lithium recycling facilities and extraction often leads to water pollution and human rights issues. Sustainability, including policies on end-of-life management, need to be integrated from the outset.
Southern Africa and the green hydrogen surge
Green hydrogen, produced via electrolysis using renewable energy, is emerging as a clean energy solution for heavy industry, transport and power. Southern Africa has seen a rapid acceleration in green hydrogen development.
Namibia leads the charge, with eight projects under development and a €10 billion Germany-backed project breaking ground in 2025. South Africa is close behind, while Mozambique has signalled interest through a recent partnership with a UK energy firm.
The regulatory frameworks for green hydrogen are still evolving. Political changes such as Namibia’s presidential succession and South Africa’s coalition government have delayed clarity on policy direction. In the interim, investors rely on these countries’ broader legal frameworks, which remain strong.
Local content is another complexity. Though no laws mandate local participation, companies are encouraged to include local partners to mitigate political risk. However, due diligence is essential as some partners may lack experience or be politically connected, raising corruption concerns.
Infrastructure is also a constraint. State-controlled, underfunded rail systems in South Africa and Namibia limit transport capacity, although reforms are underway to open rail to private operators. Logistics companies are stepping in to fill the gap, particularly in Namibia.
Environmental and community engagement is critical. Legal action such as Shell’s revoked South African oil rights in 2022 due to poor community consultation has set a precedent. Developers now face public scrutiny and must secure a social license to operate.
Green hydrogen also brings water use concerns. Both Namibia and South Africa are water scarce, and hydrogen production demands significant fresh water. Desalination and groundwater are options but carry sustainability issues of their own. As biodiversity and water security become investor priorities, careful planning is needed to balance growth with ecological responsibility.
Oil’s place in a just transition
Oil and gas remain part of Africa’s future, despite growing global pressure to decarbonise. With untapped reserves and a negligible historical carbon footprint, African governments are pushing to monetise these assets as part of a just transition.
Namibia, Angola and Nigeria are revitalising exploration efforts. While international oil companies like Shell and ExxonMobil have shifted focus offshore, this has created space for local players. Countries like Uganda and Senegal are embracing local content models inspired by Nigeria, fostering homegrown capacity through policies and partnerships.
However, the risk remains. Investor-state disputes such as those in Chad and South Sudan highlight the importance of understanding political dynamics and partner profiles. Governments sometimes impose local partners with undisclosed interests, which can lead to corruption and future legal conflicts. Investors are advised to conduct detailed due diligence and prepare for arbitration if needed.
Mining and community inclusion
Mining is central to the energy transition, supplying critical minerals like lithium, copper and cobalt. But Africa’s mining history includes environmental degradation, displacement and social unrest. The concept of a just transition in mining must address energy inequality, environmental restoration, organised crime and social inclusion.
Most mining communities lack reliable electricity, despite proximity to energy-intensive operations. Power infrastructure is built for mines, not residents. Initiatives like Zambia’s reforestation or South Africa’s mine rehabilitation offer hope, but scale and funding remain issues.
Artisanal and small-scale mining (ASM) are crucial for local economies, but are vulnerable to criminal activity. In the DRC and South Africa, illegal mining, fuel theft and smuggling undermine safety and sustainability. Better security and governance are needed to integrate ASM into a cleaner energy future.
On the social side, there are examples of inclusive development such as Ghana’s local content policies and Tanzania’s community development agreements. However they are often underfunded or poorly integrated. To succeed, mining operators must embed community programmes into their business models and partner genuinely with local stakeholders.
Africa’s energy future is a delicate balancing act between renewables and fossil fuels, growth and sustainability, development and justice. With smart regulation, multilateral support and inclusive policies, the continent can become a global leader in energy transition while ensuring its people and environment benefit from the change.
Source: S-RM Intelligence and Risk Consulting
To view the full report visit www.s-rminform.com/africa-energy-report
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