The real barrier to Africa’s solar energy boom

Rabah AREZKI
Director of Research in Economics at CERDI–CNRS
Co-President of the FERDI chair in Strategic Resource Governance: Macroeconomics and Geopolitics

CategoryPublished papers
Published on22 July 2026
PublishersFinancial Times

Reducing the cost of capital is the only way to ensure the expansion of renewable energy across the continent.

The obstacle to Africa’s energy transition is no longer the price of clean technology, which has collapsed, but the cost of capital, which has not.

A solar plant in the Sahel and one in southern Spain use much the same equipment, benefiting from the same falling panel prices, and powered, in the African case, by a stronger sun. Yet the African plant’s electricity will probably cost more for producers. The reason is not the panels, the sunshine, or the engineering. It is the cost of capital. Financing, not technology, is the obstacle.

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