- US and EU funding cuts threaten Africa’s clean energy projects, pushing the continent to depend more on private investors.
- Private sector hesitance persists due to political risks, weak infrastructure, and low returns on renewable energy investments.
- Climate goals and trade ties face setbacks as African countries reconsider emission pledges tied to international support.
The United States and European Union have slashed financial support for Africa’s clean energy drive, putting the continent’s energy transition in serious danger. These decisions now push African governments to rely more on private investors to fund projects.
President Trump’s return to office triggered a US withdrawal from the Paris Agreement. His administration immediately ended support for Power Africa, a programme designed to improve African electricity access.
The US also pulled out of the Just Energy Transition Partnership (JETP), which aimed to help countries like South Africa shift from coal. As a result, the US blocked a $500 million disbursement from the World Bank-linked Climate Investment Funds (CIF).
The US Export-Import Bank (Eximbank) also redirected its focus. Instead of backing renewable energy in Africa, it prioritises fossil fuel projects. This policy change ends years of slow progress in US support for clean energy in Africa.
Meanwhile, the European Union faces internal pressure to cut costs. Some countries argue that the European Green Deal hurts competitiveness. Increased defence spending across the bloc has forced major shifts in budget priorities.
Several EU member states have already reduced international aid budgets by up to 40%. While the EU continues to promote Africa-focused initiatives like Global Gateway and Scaling up Renewables in Africa, these face growing funding gaps.
As public money dries up, African countries now turn to private sector investors. However, the private sector has historically invested very little in African renewables, less than 2% of global clean energy funding.
Private investors avoid African projects because of low returns and high risk. Political instability, currency fluctuations, poor infrastructure, and financially weak national utilities make investments unattractive.
This shift to private finance brings major challenges. Without strong public funding, many clean energy projects may collapse. African governments must now adjust their financing strategies to keep energy goals on track.
The funding cuts also threaten Africa’s climate commitments. Many countries tied their emissions reduction pledges to international support. Without that support, they may cancel or delay their Nationally Determined Contributions (NDCS).
These commitments remain crucial for global climate talks. Countries must update their NDCS before COP30 in Brazil, scheduled for November 2025. Without funding, African nations may struggle to meet expectations.
Trade with Europe could also suffer. The EU increasingly links market access to strong climate action. Weak climate ambition could hurt Africa’s trade prospects with its biggest economic partner.
The US and EU cutbacks leave Africa at a crossroads. The continent urgently needs billions in investment to build reliable, clean energy systems. Without strong public backing, the energy transition risks slowing down.
African leaders must now explore new funding sources. These could include climate finance institutions, regional development banks, or alternative partnerships. But the timeline is tight, and the consequences are high.