SB Morgen has warned that the sudden termination of Power Africa, a U.S.-funded program that expanded electricity access across Africa, could stall energy development in Africa.
The warning was contained in the latest SBM Intelligence report titled: “Power Africa’s Demise: A Wake-Up Call for African Energy Independence.”
Power Africa, was launched by the U.S. government in 2013 to improve electricity access in Africa.
The program played a key role in developing solar mini-grids, off-grid solutions, and regulatory reforms that attracted private sector funding to Africa’s energy sector.
“For millions of Africans without reliable electricity, Power Africa represented a bridge to modernity,” the SBM report noted.
However, last week, President Donald Trump terminated the program.
SBM warned that without the program’s financial backing and technical support, electrification efforts in many African countries could slow down.
Private sector will also be affected
The report noted that the private sector will also be affected as Power Africa provided critical risk guarantees that made energy projects more attractive.
He said the exit may affect investor confidence in the energy sector.
“The private sector will also feel the pinch. Power Africa was pivotal in de-risking investments in Africa’s power sector through a combination of financial instruments, technical assistance, and policy support, helping investors navigate regulatory hurdles, currency risks, and infrastructure deficits.
“It facilitated credit and partial risk guarantees, which helped mitigate concerns about loan defaults and sovereign credit risks.
“By leveraging blended finance mechanisms—mixing concessional funding with commercial capital—Power Africa made energy projects more attractive to institutional investors and private equity firms.”
Reduce dependence on foreign energy aids
Meanwhile, SBM urged African governments to reduce dependence on foreign aid by strengthening local investment mechanisms and enhancing regional power cooperation.
- The report warned against replacing the U.S. with another foreign power to fund electrification in the continent, as it is not sustainable.
“… relying on external actors to fill the void left by Power Africa is not a sustainable solution. It risks perpetuating the very cycle of dependency that has historically hindered Africa’s energy development.
“The continent must resist the temptation to replace one set of foreign backers with another and instead focus on building internal capacity and self-sufficiency in energy production and financing,” the report noted.
- It recommended expanding regional power pools like the West African Power Pool (WAPP) and Southern African Power Pool (SAPP) while exploring alternative financing through green bonds, sovereign wealth funds, and diaspora investments.
- It was noted in the report that Power Africa’s exit could be an opportunity for African nations to take control of their energy future by fostering public-private partnerships and promoting homegrown solutions.
“Its abrupt termination now raises serious concerns about the sustainability of these gains and the fate of midstream projects. However, its successes offer valuable lessons for African countries seeking to replicate its impact independently.
“Governments can adopt similar financing mechanisms by strengthening regulatory frameworks that encourage private investment, creating local financial instruments to de-risk projects, and fostering public-private partnerships that prioritize long-term energy access.”
The report also encouraged governments to partner with development finance institutions like the African Development Bank (AfDB) and regional blocs such as ECOWAS and the African Union to facilitate coordinated energy initiatives tailored to Africa’s unique challenges.
