For years, the United States has played a significant, albeit sometimes fluctuating, role in Africa’s energy development. From ambitious USAID-backed initiatives promoting off-grid solar to recent large-scale funding for natural gas projects, American influence has been undeniable. However, a subtle but significant shift is underway. As Washington’s focus appears to be recalibrating, a cohort of nations from Northern Europe and Scandinavia is stepping forward with substantial investments in Africa’s burgeoning renewable energy sector, signaling a deepening commitment to the continent’s green future.
The recent flurry of financial activity highlights this trend. This week, through its investment arm, IFU, the Danish government injected USD 22 million into Sturdee Energy, a South African renewable energy developer. This equity investment is not merely a drop in the bucket; it’s designed to be a catalyst, unlocking an additional USD 66 million in financing. The ambitious goal? To catapult Sturdee Energy’s solar PV capacity from a modest 11 MW to a substantial 250 MW by 2027. The ripple effects are projected to be significant: the creation of over 1,500 quality jobs, a boost to South Africa’s energy security, tangible progress in addressing climate change, and a welcome injection of economic growth, all while nurturing local skills and small businesses. This investment also marks IFU’s inaugural move under South Africa’s Just Energy Transition Partnership, highlighting Denmark’s broader commitment to a green and inclusive growth model for the nation.
This isn’t an isolated incident. Just last year, a collaborative effort saw the Swedish development finance institution Swedfund and IFU jointly commit US$44 million to Sturdee Energy. This earlier investment further solidified the IPP’s mission to expand renewable energy across Southern Africa, leveraging its expertise in developing, owning, operating, and investing in clean energy projects. Sturdee Energy already boasts 31 MW of operational solar power in Namibia and Botswana and is actively constructing another 20 MW in South Africa. Their pipeline of projects, exceeding 200 megawatts across four countries, promises to add over 600 GWh of renewable energy annually, significantly reducing CO2 emissions by nearly 500,000 tonnes each year.
Further north, in South Africa’s dynamic energy landscape, Etana Energy, an innovative electricity trading platform, recently secured a substantial $75 million investment. This funding comes courtesy of Norfund AS, the Norwegian climate investment fund, and the Standard Bank Group. The structure of the deal, comprising $20 million in equity and $55 million in debt, will empower Etana to act as a crucial intermediary, connecting renewable power generators with commercial and industrial users through power purchase agreements, utilizing South Africa’s national grid for efficient energy wheeling.
The focus on impactful, localized solutions extends beyond Southern Africa. In East Africa, Stichting Clean Energy and Energy Inclusion for Africa (CEI Africa), a European initiative, also recently provided a USD 4.475 million senior secured loan to Renewvia Energy Kenya Ltd. This financing is specifically targeted at scaling up solar mini-grid operations in Turkana County, Kenya, with a focus on serving the Kakuma Refugee Camp and the Kalobeyei Settlement. This investment promises to bring electricity to approximately 15,600 new connections in a historically underserved region. Complementing this loan is a potential USD 4.2 million in results-based financing, further incentivizing the expansion of clean energy access.
West Africa is also witnessing this surge of Northern European interest. Climate fintech company MPower Ventures AG recently secured $3.9 million in funding to expand its solar energy solutions across the region. Notably, the investment round was led by CEI Africa, marking its first co-investment with crowdfunding platforms. This funding, a mix of equity and subordinated debt, will enable MPower to broaden its distributor network, enhance its product offerings, and develop innovative financing solutions to improve clean energy access for households, small businesses, and agribusinesses in markets with unreliable or non-existent electricity grids.
Even established players in the South African renewable energy sector are benefiting. Pele Energy Group (PEG) successfully raised $30 million, backed by Nedbank and, once again, the Norwegian Climate Investment Fund, managed by Norfund. This significant capital injection will bolster PEG’s ambitious plans for renewable energy expansion and socio-economic impact through its subsidiaries, Pele Green Energy (PGE) and Knowledge Pele (KP). This partnership underscores the confidence of both local financial institutions and European climate funds in the long-term viability and crucial role of renewable energy in South Africa’s future.
This growing wave of investment from Northern European and Scandinavian nations comes at a time when the United States’ approach to African energy appears to be navigating a complex landscape. While the Trump administration, as highlighted by a recent African Energy Chamber’s statement, showed strong support for the massive Mozambique LNG project, a natural gas initiative led by TotalEnergies, the focus on large-scale fossil fuel projects might signal a different priority compared to the distributed renewable energy solutions being championed by their European counterparts.
It’s important to acknowledge the historical contributions of the US, particularly through initiatives like USAID’s Scaling Off-Grid Energy (SOGE) Grand Challenge for Development and Power Africa, which provided crucial early-stage funding and technical assistance to numerous renewable energy companies across the continent. These programs played a vital role in fostering the growth of the sector. However, the current trend suggests a potential shift in emphasis, with European nations actively filling a perceived gap in direct investment in renewable energy infrastructure and access.
The motivations behind this increased European engagement are multifaceted. Beyond the clear environmental imperative to combat climate change, these investments align with broader development goals, aiming to foster sustainable economic growth, create jobs, and improve energy security in African nations. Furthermore, it reflects a strategic understanding of the immense potential of Africa’s renewable energy resources — from abundant sunshine to wind and hydropower — and the long-term economic opportunities these present.
The increasing commitment from Northern Europe and Scandinavia in African renewables is more than just a series of financial transactions. It represents a deepening partnership focused on sustainable development and a shared vision for a cleaner energy future. As the global energy landscape continues to evolve, this northern light illuminating Africa’s renewable energy potential could prove to be a defining force in the continent’s journey towards a more prosperous and environmentally sound future. While the US remains a significant player in the broader African energy sector, the rising investments from Europe’s north signal a dynamic shift in who is placing the biggest bets on the continent’s green energy revolution.