Unlocking Africa's Energy Future: The Role of Nuclear Power and Innovative Financing

Zawya

2 days ago

For many African nations, the challenge of energy access remains a significant barrier to development. However, a crucial conversation is gaining momentum: the pursuit of sustainable and reliable energy through nuclear power. Specifically, the focus is on Small Modular Reactors (SMRs) and Micro Reactors (MRs), which are increasingly viewed as a viable and transformative solution for the continent's energy needs..
However, transforming this potential into reality requires substantial capital investment and innovative financial approaches. This critical need was the main focus of the "Mobilizing Capital Investment" session at the recent Nuclear Energy Innovation Summit for Africa in Kigali, moderated by Andrew Mold, Director of the UN Economic Commission for Africa (ECA) in Eastern Africa.
Tesi Rusagara, Minister of State for Public Investments and Resource Mobilization, Ministry of Finance and Economic Planning, Rwanda, set the tone by emphasizing the evolving landscape of development finance. She highlighted Africa's historical reliance on external, concessional financing, which is now reducing. This necessitates a strategic pivot towards leveraging domestic and regional financial resources.
Critically, the Minister advocated for "looking inwards." She cited Rwanda's rapidly growing financial sector, which accounts for 67% of its GDP. This sector, traditionally focused on government securities, must now innovate to finance long-term private infrastructure projects. By collaborating closely with domestic financial institutions and de-risking projects through public and development finance, Africa can tap into a vast pool of capital currently not flowing into essential projects.
The continent grapples with an estimated annual infrastructure financing gap of $100 billion (out of a total need of $170 billion, according to the African Development Bank). This challenge is amplified by a global climate of development finance pessimism, with significant declines projected in official development assistance.
Despite these hurdles, a shift is underway. Nations like Kenya and Rwanda are actively pursuing their first SMRs.The pressing question remains: how can Africa secure the long-term, affordable capital necessary for these capital-intensive and long-duration projects?
The Director General of the International Atomic Energy Agency (IAEA), Rafael Grossi, has reaffirmed the agency's commitment to supporting African countries in developing peaceful nuclear energy programmes, stressing that the continent must be fully integrated into the global shift toward low-emission energy sources.
Speaking at the Summit, Grossi said there is 'nothing preventing Africa from claiming its place' in the evolving global energy landscape. He underscored that clean and reliable energy is no longer a luxury but a pressing necessity for the continent.
Mr. Stéphane Ouedraogo, Managing Partner, Stallion Capital Africa, addressed the task of financing projects with 60- to 80-year lifespans in the African context. He stressed the growing willingness of the World Bank to finance components of nuclear energy. This involvement, he noted, brings not only "new money" but, more importantly, "confidence," given this institution's rigorous due diligence on feasibility and security, coupled with its long-term, concessional rates.
The panel also included Mr. Ibrahim Diouf, Special Advisor to the President, West African Development Bank; Mr. Chris Opperman, Operating Partner for Africa&Middle East, C5 Capital; and Mr. Mansour Avaya, Co-founder and Chairman of Exxon, and CEO of Epox, who painted a clear picture: while significant financial challenges persist, a viable path forward for nuclear energy in Africa exists. It requires a multi-pronged approach encompassing the leveraging of international development finance for de-risking, reorienting domestic financial sectors towards long-term infrastructure, structuring innovative blended finance and PPPs, and strategically aligning nuclear projects with global climate goals.
Bridging the Skills Gap
Beyond capital, the session touched upon the vital role of human capital. The continent needs to cultivate the necessary skills to support a nuclear energy sector. The AfCFTA's protocol on the free movement of people, which enables young Africans to study and work across member states, was highlighted as a valuable mechanism for addressing these skills gaps and fostering regional expertise.
The two-day summit brought together policymakers, industry leaders, and energy experts to explore the role of nuclear power in accelerating Africa's energy transition and supporting sustainable development.
Distributed by APO Group on behalf of United Nations Economic Commission for Africa (ECA).