Africa must urgently scale up its power generation and transmission capacity to meet even the continent’s most basic development targets.
This is according to the newly launched “State of Africa’s Infrastructure Report 2025” published by the Africa Finance Corporation (AFC).
The report reveals that Africa needs to add a minimum of 16 gigawatts (GW) of grid-connected electricity generation annually until 2050 to meet rising energy demands driven by population and economic growth.
In addition, the continent must invest between $3.2 billion and $4.3 billion every year through 2040 to upgrade and expand its power transmission networks.
AFC notes that these figures are essential if Africa is to achieve a modest benchmark of 0.300 megawatts per thousand people.
Despite the scale of the challenge, the report emphasizes the immense investment potential in areas such as solar photovoltaics (PV), gas-to-power, hydropower, battery storage, and grid modernization.
According to the AFC, with the right investments and reforms, Africa can build the world’s most dynamic, integrated, and future-ready energy system, powering growth for the next generation.
Lessons from Latin America
The AFC is urging African countries to draw inspiration from Latin America’s approach to attracting private capital into the power sector. Brazil, in particular, has seen dramatic results by liberalizing its power transmission sector since the 1990s.
Through competitive auctions and independent power transmission (IPT) models, Brazil expanded its grid from 105,000 km in 2012 to 184,000 km in 2023. In 2024 alone, Brazil’s first transmission auction attracted $3.65 billion in private investment, roughly equivalent to Africa’s entire annual transmission funding need.
AFC says Brazil’s experience demonstrates that creating a viable investment pipeline, anchored in regulatory reform, unbundled utilities, and long-term planning, is essential to crowd in private capital at scale.
What It Means for Ghana
For Ghana, the AFC’s call is both timely and relevant. The country continues to face energy reliability issues, including periodic blackouts, high system losses, and ballooning energy sector debt.
Although Ghana’s installed generation capacity exceeds current peak demand, transmission and distribution constraints limit electricity delivery and efficiency. Moreover, the sector’s indebtedness in the form of legacy debts amounting to about $3.1 billion is largely due to poor tariff structures and legacy payment arrears.
The situation undermines investor confidence and threatens the sustainability of the entire power ecosystem.
To address this, Ghana can adopt key lessons from Brazil:
- Open up power transmission to private investment through structured and transparent auction systems;
- Unbundle state-owned utilities to improve efficiency and accountability.
- Create bankable long-term infrastructure plans that offer clarity to investors and development partners;
- And diversify energy sources, including solar, hydro, and gas, with a focus on decentralized and smart grid solutions.
If Ghana embraces these reforms, it could not only meet growing domestic energy needs but also position itself as a power-exporting hub in West Africa, boosting regional trade through the West African Power Pool.
