Africa’s energy challenge is not just about generation or grid access—it’s about how we finance, structure and scale solutions that are sustainable, inclusive and future-ready.
Source: Supplied. Rentia van Tonder is head of Power and at Standard Bank CIB.
Meeting this challenge requires a new kind of financial engagement: one that goes beyond capital provision to long-term partnership, local insight and ecosystem thinking.
This calls for a holistic approach from market participants—particularly capital providers—who must evolve into strategic partners capable of shaping the entire energy value chain. It’s a role that demands more than financial acumen. It requires deep sector expertise, policy engagement, local presence, and the vision to support emerging market structures that may not even exist yet.
A continental energy market in transition
There are few countries where this shift is more evident than South Africa. Regulatory reforms, including the removal of licensing thresholds and liberalised grids together with the move to a multi-market model, have catalysed private-sector participation. The rise of corporate PPAs, embedded generation and trading platforms marks a turning point in how energy is generated, sold and consumed.
Since regulatory reforms began taking effect, financial institutions have negotiated the launch of a growing number of energy projects across Africa. These include utility-scale developments under programmes like REIPPPP and RMIPPPP in South Africa, along with distributed generation and battery storage initiatives, often backed by private offtakers and emerging trading intermediaries.
From reactive lending to long-term partnership
The story of these successful deals is not merely about deploying capital. It begins with planning, a strategic vision and focus. Energy projects rarely start with a funding request. They begin with a pain point such as unreliable supply, tariff instability, or rising ESG pressure, and a business or government entity trying to solve it.
Many of the projects funded in recent years were initiated five to seven years ago. They began with conversations around business models, changing environments, technologies and regulatory feasibility.
These long-term engagements, once viewed as premature or overly complex, have helped lay the foundation for some of Africa’s more established energy initiatives—incorporating approaches that are increasingly recognised for their innovation and relevance beyond the continent.
Local presence and knowledge matters
Of course, while Africa’s energy opportunity is immense, it remains highly context specific.
Regulatory regimes and execution risks vary across borders and navigating this environment requires more than capital; it requires strong relationships. The ability to navigate local utility frameworks, engage with national regulators and structure deals in-country remains a key enabler of project success.
The greater a bank’s footprint across Africa, the more impactful its local presence becomes—a key factor in closing complex deals in countries like Zambia, Namibia, Kenya and Eswatini. These deals need not be high-volume or off-the-shelf to make a lasting impact; what matters is that they are carefully structured, often first-of-their-kind partnerships between aligned public and private stakeholders.
Aggregation: a flexible model for a complex market
One of the most transformative developments now taking shape across Africa is the emergence of aggregation in the power sector. This model allows multiple independent power producers to supply electricity to multiple offtakers, creating scale, flexibility and levels of access that single-asset deals often would not be able to.
Aggregation enables corporate users—particularly those without the scale or capital to fund their own generation—to access clean energy more affordably. It also broadens the base of offtakers, improving bankability and spreading risk, providing flexibility.
In a country like South Africa, where grid constraints and regulatory fragmentation are persistent obstacles, this kind of market mechanism is not just innovative, it is essential.
To this end, financial institutions like Standard Bank are working with aggregators and traders to build the financial structures required to make these models viable. This work draws on early engagement with policy developments, internal strategic planning, and an understanding of evolving client needs.
A commitment to enabling sustainable growth
Alignment between commercial objectives and developmental outcomes is vital. Energy finance must support industrial growth, economic resilience and climate goals. It is not just about ESG compliance. It is about enabling African economies to grow sustainably, with power systems that are secure, affordable and compatible with long-term decarbonisation efforts.
As the market evolves, so must its financial institutions. This means stepping beyond transactional models and adopting long-term, sector-led strategies. Banks must be present, informed and involved from early planning to final deal execution and implementation. Those that take this path will remain relevant and help define Africa’s energy future.
