KEY POINTS
- Africa was the only global region to record private capital deal growth last year.
- East Africa’s private capital deal value surged 75% year-on-year driven by renewables.
- The Iran war is expected to accelerate Africa’s shift away from imported fossil fuels.
The Iran war is pushing African nations to rethink where their energy comes from, and the money is starting to follow.
Abi Mustapha-Maduakor, CEO of the African Private Capital Association, said private renewable energy investments across the continent are set to accelerate as countries move to reduce their dependence on imported oil and gas. She expects capital to flow toward businesses with less exposure to imported raw materials as well.
“What we are predicting is that we’re going to see even more renewable energy transactions,” Mustapha-Maduakor said.
A region already moving
Africa entered this moment with some momentum. Private capital deal activity across the continent rose 8% last year, making it the only region globally to record growth while other continents contracted. Total investment value fell for a third consecutive year to $5.1 billion, but the pace of decline slowed sharply to 5%, down from 22% in 2023 and 9% in 2024.
Mustapha-Maduakor said institutional investors have kept allocating capital and fund managers have continued making investments despite the broader value decline.
“It’s a bit early for us to predict whether deal activity will increase and outpace what we saw last year,” she said.
Where deals are landing
The financial sector drew the largest share of private investment last year, followed by information technology. Southern Africa remained the top destination for private capital overall.
East Africa posted the sharpest growth, with deal value climbing 75% year-on-year. Renewable energy and distributed power investments drove that surge, reflecting growing demand for decentralized and resilient energy systems across the region.
The pressure from the Iran war is already visible at the consumer level. Kenya, Rwanda, Zambia, Tanzania, Namibia and South Africa have all raised regulated fuel prices, with some governments introducing tax cuts and subsidies to limit the damage. That policy response is expected to sharpen the investment case for local clean energy solutions across multiple markets simultaneously.
