Africa’s Industries Are Power Hungry, And Investors Want a Seat at the Table

Valued at roughly US$1.5 billion, the project is designed to move surplus hydropower from Angola into the energy-constrained copperbelt region of southeastern DRC, where electricity shortages continue to disrupt mining and processing operations tied to some of the world’s most strategically important critical minerals deposits.

What makes this particularly interesting is that it is one of the clearest of many examples pointing to a broader pattern emerging across parts of Africa’s energy sector, where investment, both local and foreign, is gravitating towards power infrastructure linked to large industrial demand centres capable of supporting long-term offtake, especially in mining, mineral processing, manufacturing, logistics corridors, technology, and the wider industrial activity developing around them.

None of this suggests investor appetite for renewable energy is waning; if anything, private capital flows into African clean energy projects have rebounded over the last few years, with the International Energy Agency (IEA) estimating investment rose from roughly US$17 billion in 2019 to almost US$40 billion in 2024.

What is changing, however, is where that capital is looking for certainty, regardless of the scale of the opportunity. Energy investors are more likely to enter new markets, but opportunities will be increasingly centred on robust commercial and industrial offtake, sensible regulatory and tariff regimes, and a diversified portfolio approach.

There is no doubt that international capital still wants exposure to the continent’s energy markets, but the investment logic appears much more commercially disciplined now, with greater attention being paid to the broader economic activity underlying that power demand over the long term.

Perhaps one of the more interesting longer-term questions surfacing around this logic in conversations with investors, especially those in the United States and China, is what happens as Africa’s data-centre market starts scaling more aggressively alongside the growth of AI and hyperscale computing infrastructure, both of which require enormous and highly reliable power supply. If digital infrastructure is going to grow meaningfully on the continent, then the energy required to sustain it inevitably becomes part of the investment case as well.

McKinsey estimates that African data-centre capacity demand could reach between 1.5 GW and 2.2 GW by 2030, potentially catalysing between US$10 billion and US$20 billion in investment across the continent, with the energy infrastructure required to support that growth likely to attract billions more in associated capital. Many operators are already trying to solve for this themselves, even if not yet at the scale likely to be required over time. Mining companies, manufacturers, and increasingly data-centre operators are investing directly in dedicated energy supply as reliable electricity becomes a competitive necessity. In South Africa, for example, data-centre operator Teraco has begun construction of a 120 MW solar PV project in the Free State while also securing additional renewable wind energy supply through long-term power purchase agreements for its operations.

But there is much ground to cover.

Recently, Kenyan President William Ruto revealed that a proposed US$1 billion hyperscale data-centre project involving Microsoft and UAE-based G42 had encountered a major constraint around power availability. The first phase alone required roughly 100 MW, with plans to scale towards 1 GW over time, an enormous requirement in a country whose effective grid capacity at the time stood at roughly 2.4 GW. As Ruto himself put it, powering a single hyperscale facility at that scale would effectively require ‘shutting down the whole country.’

That is part of what is drawing attention towards countries with larger and more diversified energy mixes capable of supporting demand at that scale over the long term. Markets such as Angola and Mozambique, with significant hydro and gas resources alongside wider energy export potential, are increasingly entering those conversations for that reason. It is also drawing attention towards economic corridors such as the Lobito Corridor, where investment exposure can be spread across multiple jurisdictions, sectors, and energy systems rather than concentrated around a single market or asset.

This is changing the way investors think about risk.

Concentrating exposure around a single asset or one operating environment leaves very little room when conditions change, and investors are instead looking at how exposure can be spread across different markets, different energy mixes, and different types of demand in ways that create a more resilient long-term investment proposition. And it is in these differences that navigating the breadth of opportunities across 54 countries becomes profoundly difficult, with investors entering from outside often realising too late that many of the assumptions and templates that worked in Europe, Asia, or the United States do not always translate neatly on the continent. That is making domestic partnerships far more important today. Whether through banks or other institutions already embedded within local environments, investors now need partners capable of helping them traverse the conditions surrounding projects at a country or regional level before capital is committed at scale.

Africa’s long-term energy opportunity is less likely to depend on isolated generation assets than on the ability to connect reliable power to concentrated industrial demand.

A megawatt connected to weak demand is a very different proposition to one connected to energy-intensive economic activity whose own competitiveness depends on stable electricity supply. That is where much of the first-mover advantage may be for international investors and financiers able to identify those linkages early enough.