Iran war seen boosting Africa’s renewable energy deals

Private renewable-energy investments in Africa are set to accelerate as the Iran war drives nations to try and cut their dependence on imported oil and gas.

More funds are also likely to flow to businesses that are less dependent on the importation of raw materials, African Private Capital Association Chief Executive Officer Abi Mustapha-Maduakor said in an interview.

“What we are predicting is that we’re going to see even more renewable energy transactions,” she said.

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Such an investment would help cushion economies hurt by the sudden hike in prices. Countries including Kenya, Rwanda, Zambia, Tanzania, Namibia, and South Africa have increased regulated fuel prices, with some implementing tax cuts and subsidies to contain prices.

The number of private investments in Africa increased by 8% last year, making it the only region globally to record growth, as other continents experienced a contraction. While the value declined for a third consecutive year to $5.1 billion, the pace slowed to 5% from 22% in 2023 and 9% in 2024, she said.

“It’s a bit early for us to predict whether deal activity will increase and outpace what we saw last year,” she said. “We’re seeing institutional investors still allocating capital, we’re seeing fund managers still making investments.”

The finance industry received the bulk of the investment last year, followed by information technology. Southern Africa was the top destination, followed by East Africa, which recorded the strongest growth in deal value, rising 75% year-on-year, largely driven by renewable energy and distributed power investments, she said.

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