Africa must accelerate investment in efficient, digitalised and reliable electricity grids as population growth, urbanisation and economic expansion drive demand for power across the continent, energy experts have warned.
The issue was highlighted during an African Energy Commission (AFREC) and International Energy Agency (IEA) webinar held on July 15, 2026, examining the future of Africa’s electricity systems and the measures needed to strengthen grid performance.
Africa’s electricity demand is projected to grow at more than twice the global rate between 2024 and 2050, according to the webinar materials. The continent’s electricity demand is expected to rise from 878 terawatt-hours in 2021 to approximately 3,280 terawatt-hours by 2040.
The increase will be driven by population growth, urbanisation, industrialisation, expanding digital services and rising cooling needs. Africa’s population is projected to reach 2.5 billion by 2050, while more than 560 million people currently lack access to electricity. The continent also accounts for more than 85 percent of the global population without electricity access.
Despite the need to expand electricity access, African utilities continue to face high technical and commercial losses. More than 40 percent of utilities on the continent report losses exceeding 20 percent, compared with roughly 5 to 10 percent in developed countries.
These losses contribute to a cycle of underinvestment, weak financial performance and unreliable supply. Frequent outages and inadequate voltage management affect households and businesses, while customers increasingly rely on costly backup generators, contributing to non-payment and further weakening utility revenues.
The webinar materials noted that electricity generation in Africa remains heavily dependent on fossil fuels. Fossil fuels account for approximately 75.4 percent of the continent’s electricity generation, with natural gas and coal forming a major share of the energy mix in several regions.
AFREC Senior Policy Officer Nickson Bukachi Ongeri said reducing losses must be treated as a central element of Africa’s energy transition. Better-performing grids would help utilities improve financial sustainability while increasing the amount of electricity available to consumers without requiring equivalent increases in generation capacity.
East Africa is expected to experience some of the fastest growth in electricity demand. Under projections presented during the webinar, demand in the Eastern Africa Power Pool could increase from 325 terawatt-hours in 2021 to 1,452 terawatt-hours by 2040.
The region faces a dual challenge: expanding electricity access while improving the reliability and efficiency of existing systems. Countries must invest in transmission and distribution infrastructure, modernise ageing equipment, reduce electricity theft and introduce digital tools such as smart meters and automated monitoring systems.
Kenya offers a clear illustration of the challenge. An IEA analysis presented during the event found that Kenya’s grid losses were approximately twice those of South Africa, despite Kenya’s power system being around one-tenth the size. Reducing Kenya’s grid losses from more than 24 percent to around 11 percent could save approximately 2.8 terawatt-hours of electricity — roughly equivalent to the country’s annual residential demand.
Kenya’s electricity demand is also expected to reach about five times its 2020 level by 2040. Demand for air-conditioning electricity alone is projected to increase tenfold, driven largely by growth in the services sector and rising temperatures.
The IEA estimates that Kenya will need approximately USD 20 billion in grid investment by 2040 to meet projected demand growth. Similar investment pressures are expected across East Africa, where the average cost of new grid construction is estimated at around USD 800,000 per kilometre.
Experts said digitalisation will be essential to improving grid management. Smart meters, geographic information systems, data analytics, automated controls and digital monitoring platforms can help utilities identify losses, improve billing, detect faults and respond more quickly to outages.
The African Energy Efficiency Programme is promoting measures that include energy-performance standards for appliances, distribution-loss reduction strategies and improved monitoring of energy-efficiency policies. The programme aims to train experts across African Union member states and support countries in developing national loss-reduction strategies.
The initiative also covers transport, agriculture, buildings, industry, clean cooking and household appliances. Its broader objective is to increase energy productivity by 50 percent by 2050 and by 70 percent by 2063, in line with the African Union’s Agenda 2063 goals.
AFREC has also promoted clean cooking, renewable energy, bioenergy modernisation and the development of an African domestic energy market. These efforts are intended to support affordable access while reducing emissions and improving energy security.
Regional electricity integration is being presented as another important part of Africa’s energy strategy. Power pools can enable countries to trade electricity, share generation reserves and optimise transmission assets.
The Southern African Power Pool, which includes 12 countries and serves approximately 400 million people, has an installed generation capacity of about 82 gigawatts. However, the region continues to face power deficits, congested transmission networks, ageing infrastructure and high investment requirements.
Demand-side management programmes, including time-of-use tariffs, load shifting, peak shaving, prepaid meters and solar installations, can help utilities manage periods of high demand. Regional electricity trade can also improve reliability and reduce the need for costly emergency generation.
In East Africa, stronger interconnection among national grids could support the integration of renewable energy resources and help countries manage fluctuations in hydropower, solar and wind generation.
Participants said the scale of Africa’s power challenge requires greater cooperation among governments, development partners, financial institutions and private investors. Limited access to finance, weak technical capacity, inadequate enforcement of standards and poor public awareness continue to slow progress.
The webinar concluded that improving efficiency is often a “win-win” strategy: consumers can reduce their energy costs, while utilities can limit losses, improve reliability and reduce the need for expensive infrastructure expansion.
For Ethiopia and its East African neighbours, the message is particularly relevant. Sustained investment in digital systems, renewable generation, transmission infrastructure and regional power trade will be essential if the region is to meet rising demand, expand electricity access and build a more reliable foundation for industrialisation and economic growth.
