Africa Renewable Energy Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

Africa Renewable Energy Market Trends and Insights

Rapid Decline in Solar PV CAPEX

Auction tariffs for utility-scale solar dropped below USD 0.03 per kWh in Egypt and Morocco during 2025, undercutting new coal and gas by more than 40%.^{[1]International Renewable Energy Agency, “Solar PV Cost Trends 2026,” irena.org} Module prices fell to USD 0.12 per watt in early 2026 as global polysilicon oversupply met tepid demand. Bid Window 7 in South Africa cleared 2.6 GW at an average USD 0.025 per kWh, a 60% reduction from the inaugural round ten years earlier. Algeria’s 1 GW solar tender set a ceiling price of USD 0.028 per kWh, confirming photovoltaics as the least-cost baseload option when paired with four-hour lithium-ion storage. These economics allow 20-year fixed-price PPAs, locking in debt tenors from multilateral lenders and helping the Africa renewable energy market overcome currency-risk hurdles.

Utility-Scale Wind Project Pipeline Acceleration in South Africa

South Africa’s wind queue reached 48 GW in 2024, clustered in the Northern and Eastern Capes, where capacity factors top 40%. Bid Windows 5-7 collectively awarded 5.3 GW with commercial operation dates sequenced to 2029 to ease grid integration. Eskom can only absorb 2 GW of variable renewables each year without voltage events, forcing co-located batteries or managed curtailment. Vestas captured 1.2 GW of turbine orders by assembling nacelles locally, satisfying domestic-content rules and trimming logistics costs. Kenya’s 310 MW Lake Turkana wind farm, meanwhile, proved remote projects can maintain debt-service coverage above 1.4 × even when wheeling power 400 km.

Mini-Grid Programs Backed by DFI Concessional Funding

The World Bank’s Mission 300 pledges USD 35 billion to electrify 300 million Africans via solar mini-grids and home systems by 2030.^{[2]World Bank, “Mission 300 Program Document,” worldbank.org} Nigeria’s 2025 DARES rollout financed 90,000 systems and nine mini-grids, cutting rural electricity costs from USD 0.80 to USD 0.35 per kWh. Concessional first-loss guarantees shrink blended capital costs, while inflation-indexed tariffs safeguard investor returns in Kenya’s 1,200 commissioned mini-grids. Ghana’s Renewable Energy Master Plan adds a USD 200 million AfDB facility that underwrites payment risk for rural distribution entities. Such structures expand the Africa renewable energy market beyond legacy grid footprints and anchor a robust pipeline of bankable off-grid assets.

Emerging Green-Hydrogen Export Hubs

Morocco is steering USD 32.5 billion into the 10 GW Noor Midelt and Atlantic wind complexes to export 3 million t of hydrogen annually through repurposed gas lines to Europe.^{[3]Financial Times, Heba Saleh, “North Africa Eyes Hydrogen Exports,” ft.com} Namibia’s USD 10 billion Hyphen project will deploy 7 GW of renewables in Tsau Khaeb National Park to make 300,000 t per year for maritime fuel and ammonia. Egypt’s Ain Sokhna zone signed MoUs covering 2.5 GW of electrolyzers for green-hydrogen linked to Gulf of Suez wind farms. Mauritania joined the Africa Green Hydrogen Alliance and targets 10 GW by 2030 to serve European steelmakers under the EU carbon border scheme. These ventures allow the Africa renewable energy market to monetize renewable electrons offshore, sidestepping local grid constraints.

Weak Grid Stability & Curtailment Risk

Eskom curtailed 4,363 GWh of renewables in 2024, 12% of total output, due to inflexible coal plants that cannot track solar peaks and evening wind ramps. Kenya’s grid operator restricted Lake Turkana’s output during 18% of hours in 2025 after voltage excursions on the Loiyangalani–Suswa line. Egypt disconnected sections of the Benban park for 200 hours in 2024 as frequency strayed outside the 49.8-50.2 Hz band. Such events depress project capacity factors below bank-case assumptions, triggering loan renegotiations. South Africa’s 2025 Grid Code Amendment now mandates two-hour storage on new projects, adding USD 300 per kW but reducing curtailment exposure and strengthening the Africa renewable energy market’s risk profile.

Currency-Convertibility Limitations for IPPs

Nigeria ran up a USD 2.5 billion backlog of trapped dividends in 2024 as the central bank rationed hard currency for fuel imports. Zambia's kwacha slid 40% in 2024-25, eroding tariff revenues for Scaling Solar projects and prompting change-in-law claims. Ethiopia capped foreign-currency transfers at 50% of quarterly earnings in 2025, compelling sponsors to reinvest domestically or accept discounted exchange rates. Elevated political-risk insurance premiums widen the spread between local-currency tariffs and dollar debt, slowing the pace at which Africa's renewable energy market capacity can scale.

Segment Analysis

By Technology: Solar Ascendance Reshapes Capacity Mix

Solar installations stand out as the fastest-growing technology, with a 27.84% CAGR projected from 2026 to 2031, while hydropower accounted for a dominant 62.25% of the Africa renewable energy market share in 2025.^{[4]IRENA, “Africa Technology Split 2026,” irena.org} Egypt’s 1.8 GW Benban cluster and 500 MW Kom Ombo additions showcase how desert irradiance above 2,500 kWh/m² enables 28% capacity factors without trackers. Morocco’s Noor complex integrates 580 MW of concentrated solar power with molten-salt storage, achieving seven-hour dispatchability that commands a premium over pure PV. Wind benefits from South Africa’s 48 GW pipeline and Kenya’s proven high-factor sites, yet offshore activity remains limited to pre-feasibility studies. The Africa renewable energy market size for wind and solar combined is forecast to eclipse hydropower by 2029 as procurement windows accelerate, module prices retreat, and battery costs drop.

Hydropower’s share will erode gradually as social opposition curtails mega-dam ambitions, exemplified by the stalled USD 80 billion Grand Inga project. Run-of-river and pumped-storage schemes gain favor for their lighter resettlement footprint. Kenya leads geothermal with 985 MW at Olkaria and an 83 MW unit commissioned in 2024, leveraging Rift Valley geology for baseload supply. Bioenergy and ocean-energy pilots remain small, but municipal waste-to-power in South Africa signals a gradual broadening of the Africa renewable energy market technology mix.

Note: Segment shares of all individual segments available upon report purchase

By End-User: Mining Sector Fuels C&I Surge

Utilities controlled 77.33% of installed capacity in 2025, yet payment delays and grid instability have tarnished their credit standing in several economies. The commercial and industrial segment is expected to grow at an 18.36% CAGR, fuelled by miners, data centers, and manufacturers securing clean, firm power at predictable prices. Anglo American alone is tendering 3-5 GW of supply across its African footprint, anchoring developer pipelines previously aimed only at utility offtake. Sibanye-Stillwater’s 175 MW solar plant cuts diesel exposure and meets emissions targets, mirroring a broader pivot toward behind-the-meter arrangements.

State utilities in Egypt, Morocco, and South Africa continue to procure at scale through auctions and feed-in tariffs, but developers increasingly hedge single-buyer risk by blending corporate PPAs into their revenue stack. The Africa renewable energy market size for residential remains small but is accelerating through pay-as-you-go solar home systems financed via mobile money in East and West Africa. DFIs that underwrite payment risk enable tariff structures affordable to low-income households while maintaining bankability for investors, reinforcing balanced growth across customer classes.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

South Africa delivered 7.8 GW of accumulated capacity through seven auction rounds and held a 20.89% share in 2025; yet curtailment and coal-fleet rigidity weigh on future additions. Algeria is on course for a 42.51% CAGR after launching a 1 GW tender and aligning green-hydrogen plans with Sonatrach’s export network. Egypt installed 1.8 GW at Benban, targets 10 GW by 2028, and is positioning Ain Sokhna as a hydrogen hub that draws Gulf financiers.

Morocco operates 580 MW of CSP and advances the Noor Midelt hybrids, supporting a 52% renewable-electricity goal for 2030 and aiming to export 3 million t of hydrogen each year. Nigeria financed 90,000 solar home systems and nine mini-grids in 2025, a necessary step toward a 30% renewable-generation goal by 2030. Kenya’s 985 MW of geothermal and 310 MW of wind underpin an ambition for 100% renewable electricity by 2030, buffered by reliable Rift Valley steam resources.

Ethiopia’s 5,150 MW Grand Renaissance Dam highlights the mismatch between mega-project output and limited regional interconnectors, stranding 40% of wet-season generation potential. Ghana’s 563 MW solar pipeline complements a 2 million off-grid-connection target supported by AfDB guarantees. Namibia, Zambia, Tanzania, and Mauritania together add 1.5 GW between 2024 and 2026, led by Namibia’s USD 10 billion Hyphen hydrogen scheme and Zambia’s Scaling Solar tranches. These national programs collectively push the Africa renewable energy market toward a more balanced geographic spread.

Note: Segment shares of all individual segments available upon report purchase