Ethiopia and its Sub-Saharan African neighbors are making notable progress in their energy transitions, according to the recently released “Fostering Effective Energy Transition 2025” report by the World Economic Forum. The report, published in June 2025, highlights both the achievements and persistent challenges facing the region as it seeks to build more resilient, sustainable, and equitable energy systems.
The Energy Transition Index (ETI), which benchmarks 118 countries on their progress toward secure, affordable, and sustainable energy, shows that Sub-Saharan Africa has seen improvements, particularly in regulatory reforms and policy commitment. The report notes, “Sub-Saharan Africa improved most in regulation and policy,” reflecting a growing political will to address energy access and sustainability.
However, the region’s transition remains uneven and faces significant systemic constraints. “Systemic constraints – from limited institutional capacity to financing and infrastructure barriers – continued to hamper progress, especially in low-income economies with fast-growing demand and constrained capital access,” the report states. Ethiopia, like many of its neighbors, is grappling with these challenges as it seeks to expand energy access and integrate more clean energy sources into its grid.
The report underscores the importance of adaptive, locally tailored solutions for scaling clean energy while maintaining resilience and affordability. It highlights that, while clean energy investment globally surpassed $2 trillion in 2024, developing economies such as those in Sub-Saharan Africa still struggle to attract adequate capital. Financing costs in these markets remain up to seven times higher than in advanced economies, exacerbating a $2.2 trillion annual investment gap for clean energy worldwide.
Despite these hurdles, the momentum for energy transition in Ethiopia and the region is growing. The report calls attention to Nigeria’s significant improvement in the ETI rankings, moving from 109th in 2016 to 61st in 2025, largely due to increased financial investment and infrastructure development. This progress offers a model for other countries in the region, including Ethiopia, to follow.
The 2025 ETI also emphasizes the need for stable, adaptive policy frameworks, modernization of energy infrastructure, investment in skilled talent, acceleration of clean technology commercialization, and enhanced capital investment in developing economies. These priorities are seen as essential for building resilience and ensuring the long-term success of energy transitions in countries like Ethiopia.
As the global energy landscape becomes more complex due to climate, technological, and geopolitical pressures, Ethiopia and Sub-Saharan Africa are urged to align ambition with action. The report concludes, “There is growing progress towards a secure, equitable and sustainable energy system, but momentum could stall amid financing and geopolitical challenges.” For Ethiopia and its regional peers, the path forward will require not only innovation and investment but also strong policy leadership and international cooperation to overcome persistent barriers and realize the promise of a sustainable energy future.
