Africa’s ambitious push towards clean energy is facing a major obstacle — rising debt. Across the continent, mounting loan repayments are squeezing national budgets and limiting the funds available to invest in renewable energy projects.
Many of Africa’s major economies, the same countries championing renewable energy, are now struggling to keep up with growing loan repayments. South Africa, Egypt, Nigeria, Kenya, Ghana and others have become both pioneers of clean power and prisoners of debt.
According to the Africa Debt Outlook 2024 by Afreximbank Research, just ten countries account for 69 per cent of Africa’s total external debt, up from 67 per cent a year earlier.
South Africa leads with 14 per cent, followed by Egypt (13 per cent), Nigeria (8 per cent), Morocco and Mozambique (6 per cent each), Angola (5 per cent), Kenya and Ghana (4 per cent each), Côte d’Ivoire (3 per cent) and Senegal (3 per cent).
Collectively, African countries owe external creditors US$685.5 billion as of 2023, with a total public debt of US$1.8 trillion in 2022. The continent’s debt has risen sharply over the past decade, and at least 20 low-income countries are now at high risk of debt distress.
Some nations face extremely high debt-to-GDP ratios, such as Sudan (256 per cent) and Eritrea (260 per cent), leaving little room for economic manoeuvre or new investment.
This rising debt is diverting funds from key development priorities, including the expansion of renewable energy infrastructure. In 2023, ten African nations reaffirmed their commitment to green energy, pledging to mobilise partnerships and attract large-scale investment. Yet these ambitions are increasingly constrained by heavy debt servicing and the high cost of borrowing.
Globally, the renewable energy sector is growing at record speed. The International Renewable Energy Agency (IRENA) reports that global renewable power capacity reached 4,442 gigawatts (GW) by the end of 2024 — an increase of 582 GW in just one year. Asia dominated this growth with over 400 GW, followed by Europe (70 GW) and North America (46 GW).
Africa contributed just 5 GW, accounting for only 1.6 per cent of new global capacity.
IRENA estimates that the continent needs about US$70 billion annually to meet its clean-energy goals. However, in 2023 Africa attracted only US$15 billion, or 2.3 per cent of global renewable investment — a fraction of what is needed to tap its vast solar, wind, and geothermal potential.
Kenya continues to stand out as a clean-energy leader, with more than 90 per cent of its electricity generated from renewable sources such as geothermal, wind, and hydro power.
Still, the country faces growing fiscal pressure. High fuel import costs have widened the current account deficit and weakened the shilling, making imported energy equipment more expensive. Kenya owes around US$3 billion to the IMF and holds substantial commitments to the World Bank, debt that limits the government’s ability to fund new energy projects.
In 2024, Kenya hosted the inaugural Africa Renewable Power Alliance (APRA) Investment Forum, which showcased 25 renewable projects worth more than US$1 billion and representing a combined capacity of 1 GW.
The forum aimed to link project developers with investors and accelerate implementation of bankable clean-energy ventures.
Economist Dr Fadhel Kaboub says that progress will remain limited unless the continent addresses its debt structure. “External debt consumes the fiscal policy space that could otherwise finance national priorities such as renewable energy,” he said, calling for reforms in global financial systems and trade rules to make financing fairer for developing economies.
At the Renewable Energy Conference and Expo 2025 (REC25), regional leaders from Uganda, Tanzania and beyond hailed Kenya’s energy policies as a model for sustainable transformation.
Through initiatives such as the Green Energy Acceleration Programme, Kenya is promoting private-sector innovation in electric mobility and clean cooking technologies to reduce reliance on biomass and cut carbon emissions.
These initiatives align with the Nairobi Declaration, adopted at the 2023 Africa Climate Summit, which aims to install 300 GW of renewable capacity across Africa by 2030. But experts caution that meeting this target will require more than political commitment, it will demand stronger regional collaboration, innovative financing models, and institutional reforms to attract private capital and reduce investment risk.
Africa possesses some of the world’s best renewable energy resources, abundant sunshine, vast wind corridors, and rich geothermal reserves. Yet unless countries can restructure their debt and unlock affordable green finance, this potential will remain largely untapped.
