Africa’s energy sector is rapidly expanding, with CapEx spending on both fossil fuels and renewables expected to rise through 2026, driven by major projects. Natural gas, in particular, is set to become the continent’s primary baseload power source by the end of the decade. Several key trends shaping the sector suggest a strong push toward clean energy sources and gas-focused solutions, coupled with a sustained focus on high-value, strategic oil and gas assets.
Natural Gas Growth
Gas serves as a crucial component within Africa’s energy mix, with substantial growth in LNG export capacity projected in the coming years. In Mozambique, LNG output is set to increase from 2.2 million tons per annum (mtpa) to over 43 mtpa by the end of the decade, driven by TotalEnergies’ Mozambique LNG and ExxonMobil’s Rovuma LNG facilities. Nigeria is planning to increase LNG output from 22 mtpa to over 31 mtpa, supported by the NLNG Train 7 project and deployment of a new floating LNG facility recently announced by Golar LNG and the Nigerian National Petroleum Corporation. Angola is seeking to leverage its reserves to build diversified, gas-based industries – aiming to retain 25% of its natural gas production for domestic value-added sectors by 2030 – while the Greater Tortue Ahmeyim LNG project in Senegal and Mauritania is set to produce 3 mtpa by 2027.
Offshore Exploration Surge
Offshore exploration in Africa is surging, with promising developments in hydrocarbon-rich basins. Namibia has emerged as a global exploration hotspot, with major discoveries including TotalEnergies’ Mangetti-1X and Venus-1X wells; Shell’s Graff-1X, La Rona, Jonker-1X, and Lesedi-1X wells; and a series of light oil discoveries in Galp’s Mopane complex. Meanwhile, Eni yielded the Calao discovery offshore Ivory Coast last March, while Perenco recently announced the first oil discovery in nearly three decades offshore the DRC with its Moke-East well. In Gabon, Chinese firm CNOOC has launched wildcat drilling in Blocks BC-9 and BCD-10, targeting potential large-scale oil and gas reserves.
Energy Storage Advancements
Battery storage projects across Africa have accelerated since mid-2023, driven by the need to stabilize power supply and support the continent’s growing renewable energy capacity. Battery Energy Storage Systems (BEES) Consortium, comprising 11 African countries, aims to secure 5 GW of storage solutions by the end of 2024, supported by organizations including the African Development Bank and the World Bank. In South Africa, independent power producer Globeleq’s Red Sands project will become the continent’s largest standalone BEES, stabilizing power supply and mitigating load-shedding issues with a $300-million investment.
Renewable Energy Expansion
Africa is concentrating on its renewable energy potential, leveraging abundant solar, hydro and wind resources to drive a continent-wide energy transition. South Africa’s Renewable Energy Independent Power Producer Procurement Program has attracted over $14 billion in private sector investment to date, enabling the procurement of more than 6,000 MW of renewable energy capacity. Earlier this month, the UK’s British International Investment committed $15 million to Rift Valley Energy in Tanzania, supporting new wind and hydropower projects. In North Africa, Morocco is spearheading the multi-stage 7.5 GW Amun solar PV facility, with a view to increasing its renewable energy share to more than half by 2030, while Egypt is home to the 1.8 GW Benban solar park and a series of commercial wind farms currently under construction.
Green Hydrogen Innovation
Green hydrogen projects are expanding across Africa, utilizing co-located solar and wind resources. South Africa has implemented a $5.6-billion initiative in the Eastern Cape, which includes a 1,230 MW solar farm and 372 MW of wind power to annually produce one million tons of green ammonia. Meanwhile, Mauritania’s $40 billion AMAN project aims to produce 1.7 million tons of green hydrogen annually, while ACWA Power is exploring the development of a green hydrogen project in Tunisia targeting up to 600,000 tons per year of green hydrogen. Namibia’s first gigawatt-scale green hydrogen project – the $10-billion Hyphen Hydrogen Energy plant – is expected to produce 350,000 tons of green hydrogen and two million tons of green ammonia annually before the decade’s end.
Clean Cooking Initiatives
Recent efforts to support clean cooking solutions in Africa include Ghana’s Energy Sector Recovery Program, supported by a $250-million credit and $10-million grant from the World Bank. The initiative aims to enhance Ghana’s power distribution and increase the adoption of clean cooking technologies, particularly LPG. Nigeria’s National Gas Expansion Program also promotes LPG for cooking and industrial use, supported by a $78-million intervention facility from Nigeria’s Central Bank. These initiatives aim to reduce health risks associated with traditional cooking methods, while improving energy efficiency.
