Major $$ Leaving Africa's Fossil Fuels Scene
The decline in capital flow is stark. Total fossil fuel investment in Africa has more than halved over the last decade, with a sharp acceleration in withdrawal since 2020.
Fossil risk
Over the last decade, there has been a remarkable shift in energy investments in Africa: Major capital withdrawing from Africa’s fossil fuel projects, while more capital is entering the renewable energy scene in Africa.
Major capital is withdrawing from fossil fuels in Africa for various risk-related reasons, such as the cost of capital (due to increased litigation exposure) — currently costs 3x to 4x what it costs in Europe to invest in Africa; risk of stranded assets, and infrastructure gap.
Below are a few examples that signal this systematic withdrawal.
Withdrawal timeline
The table below shows the changes major capital has been making that is growing the fossil capital drought.
As 2026 progresses, major cuts will be made towards Africa’s fossil projects due to the stranded asset risk.
The decline
Fossil fuel investments in Africa have more than halved in the last decade, with a plateau since 2022. It is not expected that major capital will return and turn up the graph due to increased systemic risks to fossil investments (see above). One notable risk is that fossil litigation is becoming more structural, and expected to balloon in key African countries like South Africa and Kenya moving forward.
Alternative investment?
Just a decade ago, investment in fossil fuels was ~10x investment in renewables in Africa. Today, fossils and renewables are at par in investments. And given increased (1) global focus on renewable energy, (2) global policy (3) the economic competitiveness of renewables, (4) country policy shifts towards renewables, and (5) risks associated with fossil investments; renewable energy investments in Africa are likely to surpass fossil fuel investments, which are projected to decline further.
Risk competitiveness
Increasingly, investors in the African energy market are comparing the risks and economics of fossil fuel vs. renewable energy projects. Data shows how risk is shifting: Renewable energy projects are increasingly becoming more competitive in Africa.