5 Opportunities to Power Africa’s Electrification and Unlock $500B Growth

JOHANNESBURG, South Africa, September 29, 2025 — Africa’s electrification journey is at a critical juncture. While the continent has made progress in expanding access to power, 600 million people — 83% of the global total without electricity — still live in the dark. A new report from Boston Consulting Group (BCG), Unleashing Africa: Powering Prosperity Through Energy Access, argues that the next five years will determine whether Africa can transform this challenge into a historic opportunity for growth, inclusion, and climate leadership.

The report highlights that achieving Sustainable Development Goal 7 (universal energy access by 2030) will require connecting at least 300 million people in the next five years. Doing so could unlock $500+ billion in GDP gains by 2040, create millions of jobs, improve health and education outcomes, and reduce carbon emissions by more than 350 million tons.

“Though the challenge may seem overwhelming, the social and economic opportunities are immense. We must be ambitious and strive to reach the goal of connecting 300 million Africans by 2030,” says Kesh Mudaly, lead author and member of BCG’s Climate & Sustainability practice in South Africa.

Why Energy Access Matters Beyond Electrons

The report stresses that electrification is not just about delivering power to homes. Without productive use, electricity risks becoming a symbolic achievement rather than a transformative one. True impact comes when energy access fuels business growth, education, healthcare, and gender inclusion.

For example, reliable electricity allows schools to extend study hours, clinics to refrigerate vaccines, and small businesses to mechanize production. It also enables women entrepreneurs — often excluded from traditional energy markets — to build livelihoods through clean energy distribution and services.

The Scale of the Challenge

• Global progress has slowed: While global “energy poverty” has dropped by 80% since 2010, Africa’s share of the remaining gap has grown.
• Funding shortfall: Nearly $50 billion has been pledged for electrification, but the total need is $90 billion by 2030.
• Technology shift: More than 50% of new connections will come from decentralized renewables, not traditional grid extension.
• Falling costs: Solar prices have dropped nearly 80% in the past decade, making mini‑grids and home systems more viable than ever.

Five Key Opportunities to Accelerate Electrification

1. Strengthen Government Planning and Reforms

Governments must set clear electrification targets backed by detailed roadmaps that identify least‑cost solutions for every community — whether grid, mini‑grid, or off‑grid. Integrated planning across ministries and donors is essential to avoid duplication and ensure efficiency.

Policy and regulatory reforms are equally critical. Simplifying licensing, ensuring tariffs allow cost recovery, and improving utility performance will create an environment where private projects can succeed. Countries like Kenya and Uganda have already demonstrated how strong planning and reform can accelerate progress.

2. Upgrade and Expand Grid Infrastructure

While renewable generation projects often make headlines, transmission and distribution networks remain the weak link. Without investment in grid infrastructure, new power plants cannot deliver electricity to demand hubs.

Expanding the grid is particularly important for connecting industrial zones and urban centers, where reliable power is essential for manufacturing, trade, and economic growth.

3. Scale Distributed Renewable Energy and Innovation

Decentralized solutions are the fastest way to reach rural “last mile” communities. In Nigeria, for example, the government — with World Bank support — is subsidizing private developers to deploy solar mini‑grids, aiming to reach 2.5 million people and 70,000 businesses in the coming years.

Innovative models using solar PV, small wind, and hybrid systems can bypass the delays of grid extension. These solutions also create local jobs in installation, maintenance, and distribution.

4. Unlock Capital Through Innovative Financing and Partnerships

Reaching financial close remains one of the biggest hurdles for energy projects. Beyond traditional development finance institutions (DFIs) and banks, new instruments such as green bonds, carbon credit projects, and blended climate finance are emerging.

African nations can also learn from international examples. In the 1990s, Brazil opened transmission to private concessions, quadrupling grid capacity and achieving universal access. Replicating such models could be a gamechanger for Africa.

5. Drive Productive Usage and Inclusion for Impact

Electrification without empowerment risks leaving communities no better off. Programs must ensure that new connections translate into higher incomes, better education, and improved health outcomes.

Models like Solar Sister, which trains women entrepreneurs to distribute clean energy products, show how access can drive inclusion. To date, Solar Sister has empowered over 5,000 women and reached 1.8 million people with solar lights and clean cooking stoves.

Similarly, initiatives that support productive use of energy (PUE) — such as micro‑loans for agribusiness equipment or financing for small businesses to adopt electric tools — can turn electricity into economic opportunity.

Building Local Champions

Africa’s energy sector is vibrant but fragmented. While entrepreneurial activity is high, few companies have the scale to deliver large capital projects or replicate models across borders. To meet electrification targets, the continent must nurture a new generation of local independent power producers and infrastructure firms.

These local champions will be critical for attracting long‑term capital, delivering complex projects efficiently, and building resilient regional operations. Without them, Africa risks over‑reliance on external actors and exposure to delivery risks.

The Road Ahead

The BCG report concludes that Africa’s electrification journey is not just a technical challenge but a transformational opportunity. With urgency and unity of purpose, the continent can dramatically accelerate energy access in the next five years.

“The experience of past projects and current initiatives make one thing clear: when Africa’s public and private sectors align efforts, backed by data‑driven planning and community engagement, the lights come on — and lives change,” Mudaly says.

Download the Full Report – Unleashing Africa: Powering Prosperity Through Energy Access

Distributed by APO Group on behalf of Boston Consulting Group.