Africa needs an energy ladder
Olamide Niyi-Afuye, chief executive of the Africa Minigrid Developers Association, argues that a connection is the first rung of Africa’s energy ladder, and that the climb has to continue into productive use and industry, with the minigrid sector able to connect 115 million people by 2030.
Writing after the UN General Assembly’s High-Level Week and Climate Week NYC, Olamide Niyi-Afuye, chief executive of the Africa Minigrid Developers Association (AMDA), sets out why a connection should be counted as “the first rung of the ladder, not necessarily the last”, and what it will take to move from energy access to industrialisation. The piece first appeared on AMDA’s website and is published here with thanks to AMDA.
I left New York after the UN General Assembly High-Level Week and Climate Week NYC with one thought that kept recurring across very different conversations: Africa’s energy challenge is evolving.
For many years, much of the global conversation has understandably focused on access. How do we connect the hundreds of millions of Africans who still live without electricity? How quickly can we reach communities that conventional grids may not reach swiftly and economically? What combination of technologies and financing can close that gap?
Those questions remain urgent. But increasingly, I believe we need to ask another question:
What happens after the power comes on?
Access alone is not the end goal. What matters is what reliable, quality power enables people and economies to achieve.
It means a small business can extend its operating hours, preserve its products, power its equipment and increase productivity. It means a hospital can reliably operate essential medical equipment, store vaccines safely and provide better patient care. It means students can study after sunset, access digital learning and pursue better educational outcomes without having to read in darkness. And in conflict-affected and remote areas, it means security and surveillance systems can operate more reliably, strengthening monitoring and response capabilities.
These are not simply benefits of electricity. They are the foundations of economic opportunity, stronger public services, human development and more resilient communities.
At the Third Roundtable on Powering the Renewable Energy Future at the United Nations, my closing message on behalf of the Africa Minigrid Developers Association (AMDA) was simple: we know the technology works. We know the demand exists. Increasingly, we also understand many of the policy and financing solutions required.
What we need now is scale: a transition from successful individual projects to replicable, commercially viable and bankable markets.
But scale cannot simply mean more connections. It must mean delivering power that is reliable, affordable and fit for purpose, while building an energy system capable of supporting Africa’s economic ambitions.
This requires us to look beyond the number of connections and ask harder questions. Are enterprises becoming more productive? Are health facilities delivering better services? Are students learning in better conditions? Are communities becoming more resilient? Can energy providers build sustainable businesses while serving customers who are often the most expensive to reach?
These are the outcomes that should increasingly shape how we design, finance and measure Africa’s energy transition.
The real measure of energy access is not just whether the lights come on. It is what becomes possible when they stay on.
That is the shift from electrification to productive energy access, and it must be central to how we think about scaling renewable energy across Africa.
Access is the first rung
Approximately 600 million Africans still lack access to electricity[1]. Distributed renewable energy solutions have become an increasingly important pathway to first-time access. According to ESMAP, they have connected 497 million people who might otherwise have waited years for a conventional grid connection[2]. Every one of those connections matters. For a household gaining electricity for the first time, the difference can be transformative.
But connecting people to electricity and powering their economic progress are two different, albeit connected, ambitions.
Electricity access exists on a continuum. For millions of households, power sufficient for lighting, communications and basic appliances represents a significant improvement in quality of life. Yet the power needed to light a home is not necessarily sufficient to refrigerate agricultural produce, operate irrigation systems, run milling equipment, weld metal, process raw materials or manufacture goods competitively.
This distinction is not an argument against basic access. It is an argument for what must follow.
The next phase of Africa’s energy transition must focus not only on who has electricity, but also on whether that electricity is reliable, affordable and sufficient to unlock greater economic opportunity.
That requires the right mix of technologies for different customers, productive activities and geographies. National grids, minigrids, distributed generation, energy storage and household energy solutions all have important roles to play. The objective is not to favour one technology over another, but to ensure that the energy infrastructure can evolve alongside the needs of the people and enterprises it serves.
An initial connection should therefore be celebrated for what it represents: a fundamental step towards inclusion and opportunity. But it should also be recognised for what it is: the first rung of the ladder, not necessarily the last.
The ladder must lead somewhere
This is where the conversation moves beyond electricity connections to Africa’s broader economic ambitions.
Africa does not need energy simply to consume more electricity. It needs energy that enables people to produce more, businesses to grow, industries to emerge and jobs to be created. The real value of electricity lies in the economic and social activity it makes possible.
Consider what reliable, quality power can unlock. Farmers can irrigate their land, reduce post-harvest losses and process produce closer to where it is grown. Small enterprises can operate machinery, extend production hours, improve product quality and serve larger markets. Hospitals can maintain cold chains and operate essential medical equipment more reliably. Students can study after dark and access digital learning. Communities, including those in conflict-affected areas, can benefit from more reliable security and surveillance infrastructure.
These outcomes matter because they turn electricity from a basic utility into an enabler of productivity, human development and economic resilience.
At a larger scale, reliable and competitively priced energy can help Africa process more of its agricultural products and minerals locally rather than exporting them primarily in their raw form. It can support light manufacturing, strengthen local value chains and help build competitive African industries capable of generating employment and retaining more economic value on the continent.
That is why the energy ladder must ultimately lead towards industrialisation, not stop at household connections.
This does not mean every rural electricity project must power a factory, or that every community should follow the same development pathway. It means energy systems should be designed to accommodate progression towards increasingly productive uses.
A household connection improves quality of life. Access to a productive-use appliance can increase a household’s income. Reliable power for a cluster of enterprises can transform a local economy. Agro-processing and light manufacturing can create jobs and retain value within communities. At scale, affordable and dependable electricity becomes part of the foundation for industrialisation.
Each step creates possibilities that the previous one alone could not fully deliver.
These are not competing objectives. They are different rungs of the same ladder, connecting energy access to economic opportunity and, ultimately, structural transformation.
The question for Africa’s energy sector is therefore not simply how quickly we can extend access. It is whether we are building energy systems that allow households, enterprises and entire economies to move up that ladder.
From connections to economic outcomes
This requires us to think differently about how we measure success. Our sector has historically focused on connections, systems deployed and megawatts installed. Those metrics remain important. But they tell us how far the infrastructure has reached, not what the infrastructure makes possible. The Benchmarking Africa’s Minigrids Report 2024[1] offers an important glimpse of that wider impact. The Powering Jobs Census 2022 estimates more than half a million direct DRE jobs globally, including approximately 374,000 direct DRE jobs across Africa[3]. The implication is clear: energy access is not only an infrastructure outcome.
But jobs created are only one measure of the value that electricity can generate. The larger question is what happens when reliable electricity becomes available to households, businesses, farmers and public institutions? What economic activity becomes possible as a result?
A connection is an output. Livelihoods enhanced, jobs created and healthcare improved are the outcomes.
The next generation of sector data needs to use the harmonised KPI framework[4] to speak the same language and answer harder questions: how much energy is being consumed, and how much of it productively; how many businesses, including agro-processors and productive-use appliance firms, have been created or expanded; how household and enterprise incomes have changed; and how many jobs are being supported, broken down by gender.
These questions move us closer to the reason we are building energy infrastructure in the first place.
Financing the rungs
Our financing architecture must evolve accordingly. One of my strongest reflections from New York was that capital exists, technology exists and demand certainly exists. The difficulty is connecting them on terms that reflect the economics of the markets we serve.
Distributed renewable energy developers carry risks that conventional infrastructure finance was not designed to absorb: currency exposure, early-stage demand risk, long development cycles, affordability constraints and, in some cases, even the cost of stimulating productive demand.
This is where catalytic capital must actually be catalytic. Patient capital can give developers the time needed to build viable portfolios. Access to local-currency financing can reduce the underlying currency mismatch between revenues and debt service, while foreign-exchange protection can manage residual currency risk where foreign-currency financing remains necessary. Guarantees can share risks that commercial lenders are not yet prepared to carry. Results-based financing can help bridge the gap between affordability and financial viability.
These are not simply different financing instruments. Together, they can create the conditions for commercial capital to follow. The scale of the opportunity makes this imperative. The minigrid sector alone has the potential to connect 115 million new people by 2030, requiring an estimated $28 billion to $46 billion in capital investment[5]. Simply providing conventional debt at marginally lower rates will not unlock that scale. Achieving the Mission 300 ambition will require a financing architecture capable of absorbing and sharing risks that commercial markets cannot yet price efficiently.
But there is another dimension. Electricity is an enabler, not the end goal.
Financing electricity infrastructure alone is insufficient. The businesses, equipment and productive assets that consume that power must also be financed. Otherwise, we risk building energy systems without building the economic activity that makes them sustainable. That means thinking about energy infrastructure and productive-use investment together. And as productive demand grows, the economics of the energy infrastructure itself improve.
Build systems that can grow
Africa’s energy deficit is far too significant, and its development ambitions too important, for the continent’s electrification future to be framed around a single technology. No single solution can meet the scale and diversity of Africa’s energy needs.
The electricity system that emerges across Africa will necessarily be diverse: national grids alongside interconnected and isolated minigrids, distributed generation, storage and household-level solutions, with the appropriate mix varying significantly between and within countries. The more consequential question is not which technology delivers electricity at the lowest cost or the fastest pace. It is how we build an electricity system that supports productive activity, enables businesses to grow, strengthens local value chains and drives industrialisation.
Ultimately, the measure of success must extend beyond the number of connections delivered to the economic opportunities created, the productivity unlocked and the lasting development value of electrification.
The objective is to build an electricity system capable of growing with Africa’s needs.
That means designing energy systems for progression. As demand grows, generation should be capable of expanding and evolving. Where appropriate, minigrids should be able to interconnect with national grids. Grid expansion should build on existing private investment in distributed renewable energy, rather than unnecessarily stranding viable infrastructure and capital. Consumers, too, should have pathways towards progressively higher levels of electricity consumption as their incomes, businesses and communities develop.
The system must be capable of climbing the ladder with them.
From projects to markets
This also changes the conversation about scale.
Africa does not simply need more successful projects. It needs functioning markets capable of producing successful projects repeatedly and at scale. That means predictable regulation, appropriate financing, transparent procurement, credible demand, stronger local institutions, investors with the confidence to invest at scale and developers capable of investing with confidence. It also means bringing governments, development finance institutions, philanthropy and industry together much earlier.
The private sector is increasingly at the table, and that is important. Developers understand where permitting becomes a bottleneck, where financing structures fail to match project economics, where regulations create unintended consequences, and where demand assumptions differ from what actually happens on the ground. That practical experience should help shape policies and DRE programmes, not simply implement them once the electricity architecture has already been designed.
This was central to my message at the United Nations: use the convening power of international institutions to turn proven solutions in individual countries into replicable, investable markets across Africa.
The next measure of success
We should never lose sight of the urgency of Africa’s electricity-access challenge.
Every household connected and every community receiving reliable power for the first time represents progress. But the first connection cannot be where ambition ends. The next phase of Africa’s energy transition must ask what happened because people were connected: whether businesses grew, farmers became more productive, communities attracted investment, incomes rose, new jobs emerged, local economies became more sophisticated, and people could consume progressively more electricity as their needs grew. At AMDA, our ambition, and that of our members, is therefore larger than deploying more minigrids. It is about creating the enabling conditions for distributed energy to become critical infrastructure for Africa’s prosperity.
Africa needs electricity access. But it also needs something beyond access.
It needs an energy ladder, and that ladder must ultimately lead towards greater productivity, economic transformation and industrialisation.
Access is the first rung. Our responsibility is to make sure Africans can keep climbing. Because the ultimate promise of Africa’s energy transition will not be measured only in panels installed, systems deployed, connections made, or megawatts generated.
It will be measured by what Africans are able to build, produce, and become once the power is on.
Sources
[1] Africa Minigrid Developers Association, Benchmarking Africa’s minigrids report (2024).
[2] World Bank, Access to electricity. In Tracking SDG 7: The energy progress report 2026 (2026).
[3] Power for All, Powering jobs census 2022: The energy access workforce (2022).
[4] Africa Minigrid Developers Association, Minigrid sector KPI framework (2026).
[5] Africa Minigrid Developers Association, 17 actions for minigrids to catalyze electrification in Sub-Saharan Africa: Mission 300 position paper (2026).
This article first appeared on the Africa Minigrid Developers Association website.
About the author: Olamide Niyi-Afuye is Chief Executive of the Africa Minigrid Developers Association (AMDA), where he leads the association’s strategy for Africa’s minigrid sector and its work towards SDG7, universal access to modern energy by 2030. He trained in law, with an LLB from the University of Kent and an LLM from the University of Birmingham, and his career has taken him from William Bailey Solicitors and Wole Olanipekun & Co. to FMDQ Securities Exchange. Before joining AMDA he was Strategic Advisor at Mainstream Energy Solutions, where he managed major hydropower investments.
Images: AMDA
