European investment in African energy and infrastructure continues to shape the continent’s future development and sustainability, with the potential to catalyze economic growth and alleviate energy poverty. Over the past decade, the European Investment Bank has allocated over $34 billion to support investment in green energy, water management, urban development, education, agriculture, telecommunications, healthcare and business initiatives across 40 African countries. Furthermore, between 2021 and 2027, the EU is set to support Africa with $160 billion in investments through the Africa-EU Global Gateway Investment Package, which aims to facilitate Africa’s green and digital transformations.
Angola’s Lobito Corridor
Italy is investing $320 million in the development of rail infrastructure associated with the Lobito Corridor – a 1,300-km railway line connecting the mineral-rich Copperbelt region in Zambia and the Democratic Republic of the Congo to international markets via Angola’s Lobito Port. The funds, which form part of Italy’s Mattei Plan for Africa – an initiative that aims to make Italy an energy hub to transport natural gas and energy from Africa to Europe – will support the development of core rail infrastructure and align with the AGIA.
Namibia’s Green Hydrogen Value Chain
Last October, Namibia expanded its collaboration with the EU when European Commission President Ursula von der Leyen and former Namibian President Hage Geingob endorsed a roadmap for the EU-Namibia strategic partnership. Under the partnership, the EU pledged $1.1 billion towards Namibia’s green hydrogen value chain, including infrastructure development at the Port of Walvis Bay. Last August, Namibia also partnered with the Netherlands in establishing NH2 Fund Managers to raise direct funds for green hydrogen projects. In addition, France’s HDF Energy has announced plans to develop a 1,400 tons-per-annum green hydrogen facility in Swakopmund, with construction anticipated later this year.
Italy-Tunisia Electricity Interconnection Project
Earlier this month, Tunisian energy supplier STEG secured approximately $507 million from Team Europe – a funding alliance comprising EU governments – to implement the Italy-Tunisia Electricity Interconnection Project. Once operational in 2028, the $914-million, 200-km undersea cable will transport 600 MW of electricity to Europe, while enhancing energy affordability and independence for Tunisia. The funding includes grants approved in 2023 and 2024 to support project planning and construction phases. The European Bank for Reconstruction and Development, European Investment Bank and German Investment bank KfW have committed $134.4 million in loans for the purchase of underwater cables and other components for the project.
South Africa’s Green Energy Transition
The UK has pledged more than $300 million toward South Africa’s green energy transition, with a focus on battery storage solution technology. Announced last April, the investment falls under the UK’s $1.8-billion commitment to South Africa’s renewable energy program under the country’s Just Energy Transition Partnership. Notably, the funds will be used to develop the Red Sand project in the Northern Cape Province of South Africa, which will be the largest standalone battery energy storage system on the continent.
Alliance for Green Infrastructure in Africa
In February 2022, the African Development Bank proposed the establishment of the Alliance for Green Infrastructure in Africa (AGIA), which seeks to support investment in and development of green and sustainable infrastructure throughout the continent. Created in partnership with investment fund Africa50, the African Union Commission and the African Union Development Agency, the alliance will support the continent’s energy transition while addressing energy poverty continent-wide. The alliance aims to raise up to $500 million, primarily for early-stage project development and preparation. This is set to open up $10 billion in further investment opportunities, while supporting project developers through to commercial and financial close.
