How to (more reliably) electrify Africa for economic growth and development

Deepening energy access must be complemented by an aggressive pro-growth agenda; with sufficient attention to economic and political incentives

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I: Energy for growth

I was recently hosted by the brilliant Rose Mutiso and Katie Auth on their High Energy Planet podcast (highly recommended). Among other things, we discussed aid cuts and the political economy of energy access in African countries. You can find wright ups of our conversation here and here. Rose and Katie are directors for research and policy, respectively, at the Energy for Growth Hub.

Among other things, the conversation got me thinking more about Mission 300 — the ambitious initiative by the African Development Bank (AfDB), the World Bank, and a number of other organizations which aims to extend power to at least 300m Africans over the next 5 years. For comparison, it has taken the better part of a decade for 100m more Africans to be connected to the grid, with the growth in connections largely driven by a handful of countries like Ethiopia, Ghana, and Kenya. Tanzania, for example, seeks to connect 8.3m people to the grid in five years under the M300 initiative. That translates to about 1.66m new connections per year, against the normal trend of about 500,000 new connections annually.

To reiterate, M300 is quite ambitious. And to succeed it’ll need a heavy dose of reality — which is the subject of this post.

I should emphasize that there is a very good reason for the M300 initiative. Energy poverty is bad for humans and the environment. Presently, more than 600m Africans (43% of the region) lack access to electricity. A further 920m (or 65%) lack access to clean cooking fuels. This includes a significant share that uses charcoal:

Nearly 200m Africans cook mostly with charcoal, including 27% of urbanites... The share has grown since 1990, offsetting the falling use of firewood. If there has been an African energy transition, it is from one kind of wood fuel to another.

As is shown below, the region lags the rest of the world in reducing the number of people without access to electricity. 75% of the global population without power are African. Therefore, it makes sense that the AfDB, World Bank, and others found it necessary to champion this initiative.

Trends in access to electricity across different regions. Source: Our World in Data.

In principle, connecting hundreds of millions of people to electricity is a great idea. Electrification offers the best opportunity for killing two birds with one stone. Greater electrification would be an important step towards eliminating both the human toll of energy poverty (health costs related to dirty cooking fuels and general poverty) and the environmental impacts of using less clean energy.

There’s also a political case for electrification beyond the politics of visible and attributable investments in access. It’s likely to prove much easier to get African publics to electrify today (regardless of source of power) and then clean up the region’s grid later. The alternative scenario where households get hooked to gas as the clean cooking fuel of choice will present much higher political and economic switching costs. For the bean counters out there, even if the region resorted to gas (which will certainly be needed in some economies), generating the power to electrify all of Africa’s households will barely increase the region’s share of global emission:

cumulative carbon emissions form the use of these gas resources over the next 30 years would amount to roughly 10 gigatons. If added to the continent’s cumulative emissions today, this would bring Africa’s share of global emissions to just 3.5 percent. This is disproportionately low given that Africa will be home to upwards of 25 percent of the world’s population by 2050.

And then there’s the need for industrial growth and dependable jobs — which ought to be a leading goal of M300.

There is not a single example of a low-energy high-income country. That said, achieving energy abundance across the Continent presents a chicken-and-egg problem. Power generation and distribution is capital intensive (and therefore expensive). This makes it hard to invest in generation and distribution capacity without guaranteed demand (in the form of anticipated rapid growth). But growth requires reliable access to energy. Here’s where governments can come in with the twin moves of guaranteeing pro-growth policies and de-risking investments in generation and transmission. Unfortunately, government failures in this regard have confined the region in a low-energy and low-growth equilibrium. To make things worse, most private sector responses to this reality are only making things worse. For example, Nigeria, roughly a $200b economy, has a national grid cannot handle more than 6GW. Consequently, a large share of Nigerian firms and households have been forced to go off-grid, a move that increases the cost of maintenance for those connected on the grid (and makes it prohibitive to upgrade the grid to handle a higher load):

More than half [Nigerian] manufacturers no longer even bother to try to connect to the grid, according to the power minister. In 2023 Nigerians spent 16.5trn naira ($10.3bn) on generating off-grid power, equivalent to 60% of the entire government budget for the following year. That brings total supply to some 20GW, a quarter of the country’s estimated power needs.

The question of reliable grid systems brings into question the bankability of data like what’s shown in the figure below. A number of African countries (and the region in general) saw increased access to electricity over the last 25 years. Yet their grids remain shaky, with both businesses and households forced to find alternative sources for when the grid fails.

Trends in rates of electricity access across Africa. M300 is attempting to force an increase in the rate of increase in access. Source: Our World in Data.

Which brings us back to Mission 300. With the right implementation strategy, M300 can knock participating countries off their present low-energy/low-growth equilibria. As I propose below, one way to do that would be to explicitly link energy access to pro-growth strategies and policies. M300 should also eschew as much as possible the temptation to excessively romanticize what they are doing at the expense of paying close attention to the economics and politics of reliable and affordable energy access.

In the next section I outline five ideas that I think would improve the chances of the M300 initiative becoming a catalyst of energy-for-growth developmental strategies across the Continent.

II: My simple wishlist for Mission 300

A common risk with initiatives like M300 is the tendency to concoct solutions at 30,000 feet in search of problems on the ground. Therefore, it’s crucial that the initiative internalizes both African government’s actual understanding (or not) of the problems of access to reliable power supply as well as the objective realities on the ground (outside of government documents).

Here, it’s worth briefly looking at Tanzania’s own assessment of the problem as part of its M300 compact:

While transmission and distribution losses remain at acceptable levels (14.2 percent for TANESCO), a significant challenge for those with electricity connections is the poor reliability and quality of service, caused by a deteriorating network with overloaded transformers, distribution feeders that are longer than industry good practice, poorly configured networks that hinder isolation of faults, and limited operations and maintenance (O&M) services. Improvements in the quality of electricity service require investments in grid stabilization, network rehabilitation, reinforcement, and upgrades, including incorporating modern switchgear and digital technologies to enhance operational flexibility.

At the same time, given the current level of cost recovery, utilities are not able to perform the required O&M without significant budget support from the government. The importance of government support in the energy sector cannot be overstated, as Tanzania’s power infrastructure cannot cope with the increasing demand from new connections, partly due to deficient public funding for infrastructure improvement and expansion as well as a limited enabling environment, particularly on matters related to project bankability for private investment.

This simple reality should be the starting point for M300. Countries like Tanzania already have grids that are facing specific challenges, and which are imposing enormous costs on their respective firms and households. The same countries also face access gaps (as already understood by the proponents of M300). Therefore, the basic challenge for M300 should be to catalyze solutions to both problems. To that end, the following might help:

1) Leverage M300 funds to fix, as much as possible, the economics and politics of African power sectors

If I had a magic wand, I would allocate as much as 40% of the resources behind M300 towards figuring out how to fix the economics and politics of power access in African countries. The goal would be to ensure reliability and affordability of current generation and distribution systems as the foundation of extending access to new power consumers. These efforts would largely boil down to two things: 1) ensuring that energy access fuels growth in all sectors in both rural and urban areas (agriculture, services, and manufacturing); and 2) guaranteeing that increased access doesn’t lead to a deterioration of the grid in terms of reliable access and financial well-being of state utilities and national treasuries.

In the recent past there has been a marginal improvement in the share of respondents across Africa with a favorable view of their governments’ handling of reliable supply of electricity. It is absolutely important that this trend is maintained/accelerated even as countries take part in the M300 initiative. Source: Afrobarometer Surveys.

The logic here is straightforward. First, and perhaps most importantly, it would be a shame if the net effect of M300 would be a deterioration of African states’ ability to maintain and expand their grids. According to the latest Afrobarometer survey data, over 70% of households with power are connected to the grid. It would be ideal if this share increased, rather that decreased under the M300 initiative.

To be blunt, the foregrounding of distributed and off-grid renewables in M300 circles worries me a lot. Off-grid solutions should be limited to special cases. DERs might work with proper integration, but it’s so easy to botch implantation without proper regulation and coordination. Furthermore, the current incentive structure appears designed to reward connecting more people (regardless of the quality and capacity of connection), rather than shifting sectoral incentives in the direction of more reliable and affordable access to power for both domestic and industrial use. This is clear in the compacts, where governments use one language (national grids, reliability, utilities’ economic viability, etc) when discussing industrial demand for power, and quite another (off-grid, nano scale, gendered narratives regarding cooking technologies) when talking about households. I fear that the latter will overwhelm the former when the rubber meets the road on project implementation under the M300 initiative.

Second, while many of the people without power today are in rural areas, the trends suggest that their future is largely urban. Indeed, new research finds that as much as 62% of unelectrified populations in Africa are actually inside or on the peripheries of urban areas (within an hour). This means that in order to connect more Africans to electricity, urban power grids must be made to work in terms of reliability and affordability. There is no way around that.

Figure showing that most a large share of the people without access to electricity in Africa live within or close to urban areas. Source: Kersey et al. (2025)

Third, there’s an urgent need for national grids that are resilient enough to reliably support economic activity without breaking national budgets (especially in an era of high interest rates). That’s the only way to ensure that investments in generation capacity will pay for themselves and therefore attract patient private capital — as opposed to the anti-growth cronyism and price gouging behind power purchase agreements of the last 30 years. Of course states must also play a role in helping de-risk such projects (including in situations where governments may find defensible reasons to subsidize access). However, system-wide financial stability must never be sacrificed in the name of arbitrary targets and timelines.

2) Make a pro-growth agenda core to M300’s DNA

What is the pro-growth case for M300? Reading the available energy compacts from African governments, it’s hard to miss the dearth of energy-for-transformational-growth thinking. One would have expected robust planning with reference to household-level demand (cooking and appliances), rural economic development (farm mechanization, water systems, agro processing), and urban firms (industrial use). Instead, the documents predominantly skew either towards reformist language without attention to industrial policy (e.g. Nigeria), or characterization of increasing access as an end in itself (e.g. Tanzania).

Projections of electricity access by source (left) and access to clean cooking fuels by 2030. Notice the minuscule projected share of electricity in the projections (and the unbelievable resilience of improved cookstoves!). Source: IEA

This need not be the case. There’s a tremendous opportunity for African governments to develop and champion very clear and reality-based energy-for-transformational-growth agendas. For example, it’s worth interrogating the extent to which M300-driven energy access projects will alter the IEA’s projections above. Ideally, the M300 initiative should nudge countries onto energy transition paths that lead to wider access to affordable and reliable grid power for industrial use; as well as the full electrification of households’ cooking and appliance needs.

I emphasize the growth case for energy access for two reasons. First, in many countries energy sectors remain hostage to elite rent-seeking and inefficient distributive politics (e.g., subsidies) to address gaps caused by rent-seeking. Second, increasingly I see African governments layering performances of “climate consciousness” onto the inefficient rent-seeking/distributive politics framework. In other words, being climate conscious has come to be conflated with seriousness about the operational and financial health of energy sectors (of course the reality is that it’s mostly about chasing climate dollars).

With this in mind, the opportunity in M300 is the possibility of infusing pro-growth consciousness and practice into the thinking in energy ministries and wider energy epistemic community in the region.

3) Don’t reinvent the wheel. Link new generation, distribution, and reforms to existing public and private sector operations.

New projects like M300 that promise a lot of money create with new politics and incentives. However, it’s important to ensure that M300 doesn’t reinvent the wheel or contribute to the creation of parallel power sectors within the participating countries. At the same time, working along the grain will call for serious analyses of potential impacts of the ambitious goals under M300 — both internally and with respect to Africa’s regional power pools.

To go back to the Tanzania example, it’s worth taking seriously the difference between 500k p.a. and 1.66m p.a. in new connections. What will be the overall effects of this step shift on the power sector (with regard to technical, financial, and political economy implications)? How will the system react? What’s the long-run path (beyond 2030) of ensuring the financial and operational stability of the Tanzanian power sector? How will domestic investments in both generation and distribution capacity integrate with regional powers markets (both the EAPP and SAPP)?

4) Avoid the temptation to wish away politics.

When it comes to politics, the M300 initiative faces internal and external risks. Internally, there will be a problem of coordination among the various agenda setters — principally the AfDB, World Bank, the foundations and philanthropies, and implementing organizations and firms. It’s extremely important that everyone reads from the same script regarding what M300 is trying to solve for. Otherwise each agenda setter will restrict their effort to meeting their own KPIs (e.g., climate, off-grid, DERs, jobs, pushing money out the door, etc).

Externally, M300 must expertly handle the political incentives of incumbent African governments. The politics of access will undoubtedly threaten to swamp any sense of prioritization and serious attention to financial stability. There will also be political economy questions regarding budgeting, policy reforms, state utilities, and donor relations.

Given the ambitious targets and short timeline, there will be strong incentives to ignore anything that might slow things down. That would be a mistake.

Ideally, you’d want to see M300 commission and have serious conversations with governments about growth-focused political economy assessments alongside the compacts. The PE assessments would answer two questions for each country: 1) what are the potential areas where energy access can unlock growth and job creation? And 2) can the political economy support such interventions, and if not, what can be done to change that? The point here is that being on the same page about the politically feasible paths of reforms/project success is just as important as being on the same page about what M300 is trying to solve for.

5) Leverage M300 to rationalize global conversations about climate change and economic development in low-income countries.

Finally, the M300 initiative ought to be a platform for mainstreaming the idea that energy access means energy access, and not gimmicky performances of “development” that barely put to a dent to energy poverty on the Continent and elsewhere. In the same vein, M300 stakeholders should seek to educate funders of energy/climate initiatives on the need to be realistic about the (distributive) politics of energy access in low-income countries, as well as the feasible options available for decarbonization. Here, I would like to echo Ted Nordhaus. While his core arguments in the post relate to philanthropies, they also provide important lessons for initiatives like M300:

In contrast to the constant seeking out of novelty, there are actually only a handful of plausible pathways to deeply decarbonizing the global economy: firm low carbon generation (nuclear, geothermal, carbon capture and storage, hydro where feasible), electrification, non-bio synthetic fuels, and high productivity, intensive, technological agriculture. To varying degrees, there are significant efforts to make headway on all of these fronts. Some (nuclear, fuels, agriculture) remain underfunded. But in most cases, there are significant players and institutions already doing the work.

So the question or challenge I would put to any new funder coming into the space is how are you going to add value to these already extant efforts? Have some of those efforts been neglected? I guess so. But the problem is more that climate philanthropy has massively over indexed on a handful of strategies and technologies that can't work—energy systems predominantly, if not entirely, powered by variable renewable energy, carbon caps and regulations, global treaties, and civil rights style protest invoking a climate emergency and demanding immediate cessation of fossil fuel development and use.

… if your benchmark for success is net-zero by 2050 or strategic impact in 2-3 years, you should just set your money on fire and heat your home with it. Not only will this not happen but prioritizing these outcomes in your strategic assessment of what to fund will assure that you have zero impact, invest huge money in technological or political vaporware, or worse, underwrite political strategies and policies that backfire.

All to say that stakeholders in the M300 initiative should always remember that both 300m and 2030 are arbitrary targets. It’s good to have goals and deadlines, of course. But arbitrarily-determined goals and deadlines can also lead to rushed implementation and prioritization of short term warm glow (e.g., lots of off-grid access to solar for lighting and not much else) at the expense of a medium to long-term step-change in African electricity markets (reliable and affordable access that catalyzes economic growth and development) and a credible path towards reducing emissions without sacrificing much-needed growth.