Accelerating Global Energy Progress with Africa at the Forefront of Investment and Innovation

In a year marked by record-breaking global energy investment and mounting climate urgency, the world finds itself at a critical crossroads—one defined by both unprecedented progress and widening disparities. The International Energy Agency’s (IEA) World Energy Investment 2025 report forecasts that global energy investment will reach an all-time high of $3.3 trillion, with clean energy technologies commanding a dominant $2.2 trillion of that total.

This surge reflects the momentum behind the global shift toward renewables, electrification, storage, and low-emission fuels. Solar photovoltaic (PV) investments alone are set to hit $450 billion—making it the largest single category of energy spending globally. Battery storage, nuclear power, and power grid upgrades are also growing rapidly, signaling what the IEA calls a “new age of electricity.”

However, behind the headline figures lies a complex picture of uneven development, geopolitical tensions, protectionist policies and shifting corporate priorities.

In a recent report, global energy research firm  Wood Mackenzie emphasized the need for energy companies to remain agile in the face of rising risks and persistent supply chain disruptions. With major economies potentially facing prolonged periods of sluggish growth, strategic adaptability will be critical.

“The current uncertainty around the tariff landscape is reshaping the energy and natural resources sectors,” said Gavin Thompson, vice chairman, of energy at Wood Mackenzie. “Lower economic growth will curb energy demand, prices and investment, while higher import prices will raise costs in sectors from battery storage to LNG. Energy leaders must now become masters of scenario planning, preparing for everything from continued growth to significant market disruptions.”

Oil Majors Scale Back on Green Goals

Despite the growth in clean energy spending, several of the world’s largest oil companies are pulling back from earlier climate pledges. BP is revising its ambitious target to cut hydrocarbon production by 25% by 2030. Shell has exited offshore wind development, redirecting its focus to liquefied natural gas (LNG). Italian utility Enel has cut its renewable budget by €5 billion, while ExxonMobil and Chevron continue to double down on fossil fuel investments.

The retreat by oil majors comes amid conflicting global oil demand forecasts. While the IEA predicts demand could peak before 2030, OPEC and major trading houses like Vitol anticipate continued growth through 2050—particularly in Asia, Africa, and the Middle East. To address declining output from mature fields, even the IEA now concedes there is a need for oil and gas upstream investments.

“I want to make it clear … there would be a need for investment, especially to address the decline in the existing fields. There is a need for oil and gas upstream investments, full stop,” the IEA Executive Director, Dr. Fatih Birol, told CERAWeek recently.

OPEC echoes this call, warning that underinvestment in hydrocarbons could undermine energy security and affordability. Its latest World Oil Outlook projects a staggering $17.4 trillion in cumulative oil investments will be needed by 2050—most of it in upstream exploration and production.

This amounts to an average annual investment of approximately $640 billion, based on 2024 U.S. dollars. A total of $14.2 trillion will be needed for upstream activities, averaging $525 billion per year. The downstream and midstream sectors will require $1.9 trillion and $1.3 trillion, respectively, over the same period, according to OPEC.

Global oil demand is projected to reach 112.3 million barrels per day (mb/d) by 2029, an increase of 10.1 mb/d from 2023 levels, according to OPEC. However, this growth will not be evenly spread. Non-OECD (Organisation for Economic Co-operation and Development) countries are expected to drive the bulk of the increase, with demand rising by 9.6 mb/d to reach 66.2 mb/d by 2029.

Looking further ahead, oil demand is forecast to grow from 102.2 mb/d in 2023 to 120.1 mb/d by 2050. This long-term growth will be fueled almost entirely by non-OECD nations, where demand is expected to rise by 28 mb/d, while demand in OECD countries is projected to decline. India, along with Other Asia, Africa, and the Middle East, will be key contributors to this surge—India alone is set to add 8 mb/d to its demand.

Three sectors will be especially important in sustaining future oil demand: petrochemicals, road transport, and aviation. By 2050, these sectors are expected to grow by 4.9 mb/d, 4.6 mb/d, and 4.2 mb/d, respectively.

“Further oil and gas investments are necessary, if future market shocks are to be avoided, and security of supply to consumers is maintained,” the report said. “It should also be noted that security of supply is the mirror image of security of demand for producers, who must have certainty that their investments will be needed.”

Africa: Rich in Potential, Starved of Investment

Nowhere is the investment gap more stark than in Africa. Although home to 20% of the global population, the continent receives just 2% of clean energy investment. Nearly 600 million Africans lack access to electricity, and 1 billion are without clean cooking fuels.

Over the last decade, total energy investment in Africa has dropped by one-third. The IEA warns that without urgent financing reforms and international support, Africa risks being excluded from the global energy transition. The continent needs over $600 billion annually in upstream oil and gas investments through 2030 to meet rising energy demand and unlock economic growth, according to the International Energy Forum.

IEA Executive Director  Birol,  described the situation as deeply concerning.

“To close the financing gap in African countries and other emerging and developing economies, international public finance needs to be scaled up and used strategically to bring in larger volumes of private capital,” said  IEA.

Industry voices in Africa echo this concern. Speaking at a recent event in London, the  Commission Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engr. Gbenga Komolafe stated that the $600 billion investment need as being projected by IEF, is necessary to  enable Africa  meet its developmental and sustainability goals.

“As the world races towards a low-carbon future, projections from BP’s Energy Outlook 2024 remind us that hydrocarbons will still supply over half of global energy needs by 2050. Meanwhile, Africa’s own energy demand is poised to surge by 30 per cent by 2040, driven by rapid population growth, industrial ambition, and the rightful quest for universal energy access. Meeting this demand sustainably will require over $600 billion in upstream investments annually through 2030, according to a study conducted by the International Energy Forum last year.

“This investment is not just desirable; it is absolutely necessary if Africa is to meet its developmental goals and transition sustainably. Interestingly, the global community increasingly recognises that the path to net zero must be just, inclusive, and region-specific,” Komolafe said.

In an address at an  energy event some  months ago,  Secretary General of the African Petroleum Producers’ Organisation (APPO), Dr. Omar Farouk Ibrahim, issued a bold call for African nations to break free from longstanding dependencies on foreign financing, technology, and markets in the oil and gas sector.

Speaking to a high-level audience of government ministers, industry leaders, and energy stakeholders, Ibrahim outlined what he called the “three imminent challenges” facing Africa’s oil and gas-producing countries in the era of global energy transition.

“Today, the challenges facing oil and gas producing countries in Africa goes beyond oil and gas production for export,” Ibrahim said.

“These are the challenge of financing oil and gas projects, the challenge of oil and gas technology and expertise which the continent lacks and the challenge of creating alternative markets for our oil and gas as those on whom we have depended for markets for our oil and gas continue their efforts to wean themselves from oil and gas in the name of energy transition.”

A study conducted by APPO in recent years laid the foundation for the Secretary General’s remarks, identifying a troubling pattern of what he described as “unequal interdependence.” African nations, he said, have for too long relied on external actors—primarily from the Global North—for capital investment, industrial technology, and market access, while receiving little reciprocal dependency in return.

Ibrahim called on African countries to learn from past mistakes, abandon a dependency mindset, and take “uncommon actions” to shape their own energy destiny. He emphasized that the continent’s development would not come from aid or handouts but from a collective belief in African capacity and innovation.

“We have been heavily dependent on outside Africa for project financing, for the technology of the industry and for the markets of our oil and gas. But those on whom we have been solely dependent were never solely dependent on us for their oil and gas.

“Africa cannot continue lamenting its mistakes. It is time to look forward and take uncommon actions to right the wrongs of the past.  In doing so, we have to first accept that our salvation as a people lies within us, not from anyone or any country outside. It does not lie in receiving aids in any form. It lies in our ability to get out of our minds the ingrained belief that we, Africans, cannot make it without assistance from today’s developed countries,” he added.

Investment, Diversification, and Innovation in Africa

Africa’s energy sector is experiencing a surge in investment, with both operators and financiers expanding their footprint across the continent. Capital expenditure is projected to reach $43 billion in 2025 and climb to $54 billion by 2030, according to the African Energy Chamber (AEC). Onshore projects are expected to dominate, accounting for 56% of total spending, while natural gas will attract over 60% of hydrocarbon investment by the end of the decade. Deepwater exploration is also gaining momentum, particularly in emerging markets like Namibia and Côte d’Ivoire. Despite this growth, securing funding for exploration and production remains challenging as global capital availability continues to shrink.

Beyond oil and gas, the continent’s renewable energy and power sectors are also gaining traction. With over 600 million Africans lacking access to electricity, countries are ramping up efforts to build out energy infrastructure—from generation and transmission to storage. Still, financing remains a critical hurdle. The IEA estimates that Africa will need to more than double its annual energy investment to over $240 billion by 2030 to meet energy access, climate, and development targets. Key areas include grid expansion, clean energy technologies, and electrification initiatives.

Amid shifting global energy dynamics and tighter traditional financing, African National Oil Companies (NOCs) are adopting innovative funding strategies to sustain growth. Approaches such as privatization, bond issuances, joint ventures, and resource-backed loans are helping these state-owned enterprises raise capital for exploration, production, and infrastructure projects. Privatization and asset divestments, in particular, have proven effective in enhancing operational efficiency, while vendor financing is also gaining popularity.

Nigeria’s Energy Reforms Gain Traction

Nigeria is leading by example. The country has launched sweeping reforms to position itself as a key player in the evolving energy landscape. President Bola Tinubu signed three landmark executive orders in 2024 aimed at incentivizing investment, enhancing local content, and reducing petroleum sector costs and contract delays.

The results are already evident. Indigenous firms are acquiring assets from international oil companies (IOCs), and local projects are gaining traction. Green Energy Limited recently unveiled Nigeria’s first locally built onshore crude terminal, while Seplat Energy and Renaissance Africa Energy have committed billions to boosting domestic production and gas infrastructure.

According to the Africa Energy Council (AEC) the current wave of indigenous oil companies is redefining Nigeria’s energy future, marking a pivotal shift in the country’s hydrocarbon landscape.

“The surge of indigenous Nigerian oil firms has ignited a rare momentum in the sector where private ambition meets national resilience.

“Conoil’s groundbreaking Obodo blend, with its maiden cargo shipped in May 2025, exemplifies how local operators are no longer mere participants but innovators, diversifying export slates on their own terms. Similarly, Heirs Energies has transformed OML 17 into a textbook brownfield revival, doubling output to over 60 thousand barrels per day by reactivating 60 wells, a potent testament to domestic technical capability.

“Meanwhile, Seplat’s 320 million dollar capital expenditure pledge toward expanding gas and ramping oil output, and Waltersmith’s modular refinery expansion, underscore a clear pivot toward midstream development and local value addition. These ten strategic strides collectively sweep through Nigeria’s hydrocarbon value chain and validate the central thesis that local now drives the delta,” the Council said in a social media post.

AEC emphasized that Renaissance Africa Energy’s acquisition of Shell’s onshore assets, coupled with its $15 billion commitment to revitalizing them, was a landmark move. But recent ruptures and spillages along the Trans Niger pipeline serve as sharp reminders of deep-rooted infrastructural and security vulnerabilities.

While indigenous firms bring stronger community engagement and operational agility, it noted that they still wrestle with the inherited liabilities of sabotage, theft, and environmental degradation—legacies of decades-old industrial neglect.

Meanwhile, Shell’s Final Investment Decision on the Bonga North deep-water project marks another milestone. Set to add 110,000 barrels per day, the project reflects renewed international confidence in Nigeria’s energy sector.

New directives have also cut contract approval cycles from three years to just six months, with significant tax relief now available to companies achieving cost efficiencies. These moves are enhancing Nigeria’s competitiveness and attracting global partners.

However, a new industry report by Wood Mackenzie has revealed that Nigeria must secure more than $12 billion in upstream oil and gas investments annually to achieve the production targets set by President Bola Tinubu’s administration.

The report, titled “The Edge,” highlights the urgent need for sustained capital inflows to double crude oil production to 3 million barrels per day (bpd) and boost gas output to 12 billion cubic feet per day (bcfd) by 2030.

According to the report, “A culture change has begun with sweeping changes to the board at national oil company NNPC, more supportive fiscal policies and a suite of new JV operators suggesting the ingredients to drive growth are finally falling into place. The big question is: will the industry deliver?”

Investment in the sector has plummeted from a peak of $29 billion in 2014 to just over $5 billion in 2024. Wood Mackenzie warns that this current level is the bare minimum required to maintain existing production levels. To meet Tinubu administration’s ambitious targets, investment needs to more than double to $12 billion annually and continue to grow throughout the decade.

The report identifies three key factors that will determine whether Nigeria can meet its goals: collaboration, urgency, and pragmatism.

It emphasizes that collaboration among all stakeholders—government, NNPC, and private operators—is critical to unlocking the country’s full production potential. Operators are also urged to focus on high-value projects and align their growth strategies to overcome longstanding operational and structural challenges.

Next Frontier

Experts agree that innovation and international cooperation are central to sustaining energy progress. Nigeria’s push to diversify its energy mix includes expanding LNG and CNG use, exploring renewable solutions, and investing in emerging technologies like artificial intelligence and blockchain.

At the 2024 NOG Energy Week, stakeholders emphasized the value of partnerships with institutions like the African Export-Import Bank (Afreximbank) and the International Finance Corporation (IFC). One such project, backed by the IFC, aims to deliver electricity to 400,000 Nigerians through renewable energy access.

Regionally, the launch of the African Energy Bank (AEB) and implementation of the African Continental Free Trade Agreement (AfCFTA) are opening doors to cross-border financing and infrastructure development.

During a meeting with Professor Benedict Oramah, President of  Afreximbank, Nigeria’s Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, reaffirmed Nigeria’s strong backing for the AEB and its critical role in advancing Africa’s energy sector.

He further urged stakeholders in the industry to take advantage of the opportunity to invest in the continent’s energy future.

“As a leading oil and gas producer, is well positioned to leverage this transformative initiative,” Lokpobiri said.

“We encourage industry players to seize this opportunity to invest in Africa’s energy future.”

Oramah emphasized  the significance of the  bank, highlighting the key role it will  play in bridging Africa’s energy financing gap.

“The establishment of the Africa Energy Bank is a game-changer for the continent,” he said.

Meanwhile,  AEC  has renewed its call for the World Bank to lift its ban on financing upstream oil and gas projects, emphasizing that such a move is critical to addressing energy poverty and supporting sustainable development across the continent. The Chamber argued that unlocking Africa’s hydrocarbon resources is essential for expanding access to reliable and affordable electricity, while also generating the revenues needed to support a just and long-term energy transition.

According to the AEC, Africa must be allowed to develop a balanced energy mix that includes both fossil fuels and renewable energy sources. It warned against a rigid “all-or-nothing” strategy that could leave hundreds of millions of Africans without access to modern energy.

The benefits of upstream oil and gas development are already evident. In Mozambique, domestic gas powers the 450 MW Temane gas-to-power project, supplying electricity to homes and industries. Senegal’s gas-to-power program, Nigeria’s Gas Master Plan, and Egypt’s expanded gas-fired generation demonstrate how natural gas is driving regional electrification and economic growth. Looking ahead, future upstream projects hold significant promise: Mozambique’s gas reserves could generate over $100 billion in revenue, while Namibia’s recent oil discoveries could yield up to $3.5 billion annually at peak production — funds that could be reinvested in critical sectors such as infrastructure, healthcare, education, and clean energy.

At the same time, global financial attitudes toward fossil fuel investment are evolving. Major U.S. banks are relaxing ESG-related restrictions and resuming oil and gas financing, acknowledging natural gas as a vital transition fuel. The AEC insists that the World Bank should follow suit — not as a compromise, but as part of its core mission to reduce poverty and promote shared prosperity in developing regions

“The green agenda and the World Bank’s ban on upstream financing ignore the fact that natural gas can bring life-changing prosperity to Africa through jobs, business growth and monetization,” said NJ Ayuk, Executive Chairman of the AEC.

“We are proposing a logical, sustainable path: using our natural gas to meet current needs, generate revenue and fund our transition to renewables. Given that universal access to affordable, reliable electricity is one of the UN’s Sustainable Development Goals, the growing number of Africans without power is morally wrong and must not be ignored.”

Nigeria’s Minister of State for Petroleum Resources (Gas), Hon. Ekperikpe Ekpo, has also urged African nations to deepen regional cooperation and drive innovation in order to fully harness the continent’s abundant natural gas resources.

Ekpo cautioned that isolated national efforts would fall short of delivering the transformative energy outcomes Africa needs.

The minister stressed the importance of a united front in developing Africa’s gas economy.

“Africa is at an inflexion point in its energy journey. While the global discourse on decarbonisation intensifies, Africa must define its path, one that is just, equitable, and context-specific. Natural gas remains that bridge fuel for Africa, a transition energy source that supports industrialisation, expands electricity access, fuels economic diversification, and mitigates emissions when replacing coal or biomass,” Ekpo said recently at an industry event in Abuja.

Ekpo warned that without harmonised policies, shared infrastructure, and strong cross-border partnerships, Africa risks missing the opportunity to fully capitalise on its gas potential.

“National efforts alone are not sufficient. The resilience we seek in Africa’s gas economy must be continental. That resilience must come from cross-border cooperation, harmonised regulatory frameworks, shared infrastructure, regional markets, and common financing platforms. A fragmented approach will not deliver the scale or the impact we desire,” he added.

Conclusion

The global energy transition is undeniably underway, marked by historic levels of investment and technological advancement. However, this progress remains uneven, with Africa still grappling with underinvestment, limited access to clean energy, and systemic dependencies on external financing and markets. To close this gap, a deliberate and inclusive approach is essential—one that recognizes Africa not just as a passive recipient of aid but as a key player in shaping the world’s energy future.

Unlocking Africa’s vast energy potential—across oil, gas, and renewables—requires bold investments, stronger public-private collaboration, and regional ownership of development agendas. As Nigeria’s reforms show, domestic innovation, regulatory clarity, and indigenous participation can drive meaningful change. With strategic support from institutions like the African Energy Bank and a recalibrated global financing framework, Africa can accelerate its transition while ensuring energy security, economic growth, and climate resilience.

At this critical juncture, aligning global ambitions with Africa’s development realities is not just a moral imperative—it is a strategic necessity for a truly just and sustainable energy future.