Attracting Private Investment in East and Central Africa’s Energy Sector
The Mubuga Solar Plant, Burundi’s first solar power plant, is the product of a partnership among Power Africa, the Government of Burundi, and Power Africa private sector partner Gigawatt Global. Launched in 2023, the plant currently generates more than eight megawatts (MW) of renewable energy, a significant contribution to Burundi’s total energy output of 55 MW, and powers more than 100,000 households in a country where only five percent of the urban population and two percent of the rural population has access to electricity.
Burundi’s energy landscape reflects the broader energy challenges in sub-Saharan Africa, where many state-owned power utilities struggle to meet growing energy demand. Factors impacting service delivery often include mismanagement of resources, limited technical expertise, and operational inefficiencies. These challenges also dampen the appetite for private sector energy investment. Political interference, frequent changes in laws and regulations, and a lack of transparency in the sector also impede investment.
To incentivize private investment in the energy sector, Power Africa implements a public–private partnership model, providing technical support and financial linkages to private sector players and state corporations engaged in partnerships. This model has led to unlocking power transactions and improved services for energy end users, mostly African consumers and small-scale businesses. In East and Central Africa, for example, Power Africa has supported the 40 MW Kesses I solar project in Kenya and a 56 MW solar project in Rwanda.
In Burundi, we are supporting Power Africa private sector partner Anzana Electric Group, formerly Virunga Power, to implement a rural energy development project through a public-private partnership model. By providing legal support to Anzana Electric Group and technical and legal expertise to the Government, Power Africa is helping attract funding from the private sector. Private financiers, such as Power Africa partner Africa50, have similarly invested in power projects in the East and Central Africa corridors. The public-private partnership model has encouraged diversification into new, clean energy sources, such as the Power Africa-supported Menengai geothermal projects in Kenya’s Great Rift Valley.
To boost private investment in energy generation, Power Africa provides investors with market insights and deal structuring support. Beyond helping companies access finance for their projects, Power Africa provides advisory services on legal issues, business development, and risk management. To promote sustainability, Power Africa joins with state utilities and private actors in the energy sector to conduct feasibility studies and see that energy projects conform to market needs, legal and regulatory frameworks, and the macroeconomic environment.
By engaging state and private sector stakeholders based on their unique needs and by fostering collaboration through the public-private partnership model, Power Africa is spurring investment by private energy investors and increasing energy access across East and Central Africa.
