Africa’s ambition to achieve universal energy access and meet its climate commitments is at risk of being derailed by financing imbalances that could push the continent deeper into debt, according to a new report by the United Nations University Institute for Natural Resources in Africa (UNU-INRA).
The study, Counting the Cost: From Extraction to Green Transition – Tackling the Dealbreakers of Finance, Justice and Development, warns that while Africa requires $25–50 billion annually to close its energy access gap by 2030 and an additional $200 billion each year to finance its climate pledges, most of the available funding comes in the form of loans rather than grants.
Energy Insecurity Remains Acute
Despite holding vast renewable and mineral resources, Africa still struggles with energy insecurity. More than 600 million people across the continent lack reliable access to electricity. The report stresses that without significant investment, the continent risks missing both development and climate targets, while piling new layers of debt on already fragile economies.
Justice and Equity in Global Climate Finance
The report also raises concerns over fairness in the global green transition. It highlights the European Union’s new Carbon Border Adjustment Mechanism, which could penalise African exports and further erode trade revenues.
“Africa is being asked to serve as the world’s carbon sink, but no adequate support mechanism exists to match this demand,” said Prof. Fatima Denton, UNU-INRA Director and lead author of the report, at the African Climate Summit in Addis Ababa.
The Road Ahead: Green Industrialisation
According to the study, Africa’s renewable potential spanning solar, wind, hydrogen, and critical minerals such as cobalt offers an unmatched opportunity to lead in the green economy. But this will only deliver meaningful results if countries move beyond raw material exports to local value addition and industrialisation.
“Green industrialisation, anchored in clean energy and mineral value chains, must be central to Africa’s future,” the report states. It calls for regional integration, stronger intra-African trade, and policy alignment to maximise bargaining power and resource benefits.
Implications for Africa’s Investment Climate
For policymakers and businesses, the message is clear: Africa’s transition cannot rely on costly borrowing alone. Without more grants and fairer financing, efforts to expand energy access and build climate resilience may compromise economic stability.
The report concludes that a just transition must deliver not only climate gains but also sovereignty, resilience, and prosperity for Africa’s people
