Africa is the youngest and fastest growing continent on Earth, yet development has often evaded the nations aside from a lucky few. This comes down to a myriad of historic and current reasons: legacy of colonialism, corruption, destabilization in the Cold War, foreign meddling in domestic politics, etc. To say that the post-colonial period hasn’t been easy feels like the understatement of a century. For many nations, it has been crises after crises.
Yet, even with such challenges, there is a sense of optimism to be found. A literal light at the end of the tunnel so to say. Africa has 60 percent of the world’s best solar resources and less than 1 percent of current installed solar capacity. This represents a transformative natural gift, and if managed properly, the path to true energy independence and economic freedom.
Almost 600 million people in Africa still lack access to electricity, and more than 900 million still cook with biofuels such as wood. That’s fairly established and agreed upon, but what folks can’t agree on is why it’s still true after decades of “development” financing from foreign nations and multi-national organizations.
For a century, energy development in the Global South has followed a rather basic formula: a foreign company or state decides to finance a power plant, dictates the debt terms, and exports the profits out. Coal and gas plants in Africa are often still financed this way, with the added twist that the debt survives even when the plant doesn’t deliver reliable power.
Part of the answer: the financing itself reproduces colonial extraction patterns rather than breaking them. Large hydrogen and solar megaprojects pitched to North African states, for instance, have been criticized as a new resource grab: the power gets built to serve European energy security, the receiving country takes on the debt and the land-use costs, and the electricity doesn’t end up going to the nations that built it in the first place. A 2025 review of Africa’s energy landscape put it plainly: the continent’s renewable potential is constrained by neocolonial patterns of resource extraction combined with rigid fiscal limits (due to World Bank and IMF loans) and fossil fuel dependency inherited from the same donor groups now writing and sponsoring the climate checks.
Ghana is the clearest current example of what this development model produces. Under IMF-backed programs (originally meant to stabilize the country’s finances) the energy sector’s debt has continued to compound rather than resolving. By mid-2025, Ghana’s cumulative energy-sector liabilities had surpassed $3 billion, most of it owed to independent power producers and fuel suppliers that built and now run the country’s thermal plants. Even as Ghana prepared to exit its IMF Extended Credit Facility program this year, economists warned the energy debt still threatened spending on health and education, because the underlying structure, dollar-denominated power contracts serviced with Ghanan Cedi revenue, never actually changed. The IMF’s own prescription was more of the same medicine: raise tariffs on electricity, renegotiate a few contracts, tighten collections. That treats the debt as a management failure when in reality it is a structural one. Baked into a financing model where the plant, the fuel, and the loan all originate outside the country and get paid for in a currency the country lacks any control over. Solar, and specifically the decentralized, locally owned version of solar, is the first energy technology in a long time that doesn’t require accepting these deals.
Unfortunately, African nations received just about 2 percent of global clean energy investments despite, as previously stated, sitting on some of the best solar and wind resources on the planet. The IEA puts the continent’s real annual financing need at $190 billion through 2030. What it’s getting is not even a rounding error of that amount, while fossil fuel projects elsewhere in the world continue attracting billions in capital that developing nations are told is too risky for them.
Centralized power, whether coal, gas, or a mega-hydro dam, needs a grid, a national utility. Usually a foreign lender or multinational construction company will be standing behind all of it. That’s the underlying point where control gets exercised: whoever finances the plant sets the terms and receives the paychecks once it is done. Sure, a nation may receive billions in financing on paper, but if the company building this project is Australian and the electricity company running it is French, the money that flowed into the developing nation will ultimately flow right back out to these international conglomerates.
Decentralized solar routes around this by its inherent design. A mini-grid or a solar home system doesn’t need the national transmission network to exist first. It can be financed, built, and owned at the village or household level providing off-grid capabilities. We can even see that off-grid solar now serves more than 400 million people worldwide, and in Africa specifically, 62 mini-grids are fully operational with another 28 under construction. The World Bank projects mini-grids could reach 380 million Africans by 2030.
Nigeria, Rwanda, and Tanzania are the current proof of this concept working. Companies like M-KOPA, Bboxx, and d.light have built profitable businesses selling solar directly to households on pay-as-you-go terms, no state utility or foreign concessional loan required for the transaction to happen. That’s a fundamental change in type of power relationship than the stereotypical 25-year power purchase agreement negotiated between foreign utilities and finance ministries.
Yet, it’s falling costs that make this relationship possible in the first place, and as I previously wrote, Pakistan is the sharpest example of what happens once the price crosses a threshold. With no state solar program and no subsidy campaign, ordinary households simply started buying panels: cumulative imports went from under a gigawatt in 2018 to more than 51 gigawatts by early 2026, and by summer 2025 solar had become the country’s single largest source of electricity at peak hours. Nobody financed that aside from individuals around the nation. Global panel prices fell by roughly half on the back of Chinese manufacturing scale, grid tariffs rose 155 percent over three years, and the math worked in favor of Pakistani households now able to run on solar in some form. There’s no donor, no multilateral lender, and no foreign utility anywhere, which is precisely the point: once the hardware became cheap enough, the financing chokepoint that colonial-style energy deals depend on simply stops being necessary.
Ownership structures matter as much as the panels themselves here. In one mini-grid project in Mbiabet, Nigeria, a small grant let residents retain 20 percent ownership of the system, with locals being the ones to install and maintain the system. That’s a small number, but it’s the right direction: energy infrastructure that is community-built and community-owned, rather than infrastructure it just hosts and pays rent on to a faceless multi-national corporation.
Decentralization isn’t the only way to break the old financing pattern. Mexico is running a bit in the opposite direction: instead of routing around centralized ownership, it’s locking the state itself into the ownership structure by law. Under the previously talked about 2024 constitutional reform, the state utility CFE must hold at least 54 percent of any generation project, capping private capital at a minority stake. Foreign developers don’t get to show up with a checkbook and dictate terms the way Iberdrola once could; they come in as junior partners in a joint venture the state controls and manages for the people of the nation.
Unfortunately, the ultimate test of this model will be whether capital still shows up on those terms, but so far it has. CFE’s first competitive tender under the new mixed-investment scheme drew bids worth nearly five times what the government asked for. That’s a different answer to the financing-and-control problem than a Kenyan mini-grid financed by a Rocky Mountain Institute grant, but it’s aimed at the same underlying fear: that “development” ends with a foreign entity holding the leverage and extracting profits from a nation that can’t say no. Mexico’s bet is that you don’t need to decentralize the grid to keep that from happening. You just need to make sure the state can’t be voted off the board.
It’s not a clean win. The same reform that keeps ownership local also is slowing the buildout: transmission investments haven’t kept pace with demand, and Mexico’s own transition scorecard has fallen as a result. State control bought Mexico leverage over the terms of its energy build-out, yet when looking forward, the nation now has the flexibility and power to dictate terms, a luxury few others could dream of.
None of this is automatic, and folks should be skeptical of anyone selling solar as a clean escape from the old dynamics of neocolonialism. Researchers studying Sub-Saharan mini-grids have found that donor-installed systems without a real ownership or maintenance structure fail fast: some systems rated for 20 years don’t survive past year three. A solar panel dropped in by an NGO with no local support behind it is just a shinier version of the same top-down model that failed before it.
The honest version of the mini-grid sector today is still heavily donor- and grant-dependent, not necessarily some market-driven, neo-liberal miracle it gets sold as by places such as the IMF. About 3,000 mini-grids currently operate in Sub-Saharan Africa, and most run on grants and non-commercial capital rather than sustainable business models. That’s not a knock on solar itself but rather a reminder that hardware alone doesn’t rewire an imbalanced power relationship. The financing behind it is what truly will break the cycle.
There’s also a counter-argument worth looking into: some voices (albeit often from fossil-fuel-aligned think tanks so take it with a grain of salt) argue that restricting fossil fuel financing to Africa in the name of climate policy is its own form of colonial control, denying countries cheap, dispatchable power that wealthy nations used to industrialize in the first place. There’s a kernel of truth buried in there (albeit wrapped in a dangerous self-serving argument by fossil fuel companies trying to get every last drop of profit). Africans have contributed less than 3.5 percent of cumulative global emissions, and telling those countries to skip the fossil-fueled growth phase that every wealthy nation used is a hard sell when it comes from the same nations that burned our collective, global carbon budget in the past.
The difference is that solar, unlike a Western-financed gas plant, doesn’t require any trade-offs. It’s not “clean power instead of development.” When done right, it’s development that doesn’t require asking permission or taking on decades of foreign-currency debt first. It’s a pathway to leap-frog the years of pollution and environmental degradation that so many nations have faced on the path to development. In many ways, the argument comes down to fossil fuel aligned think tanks being unable to envision (or choosing to omit) a future that could exist where nations no longer rely those companies.
Neocolonialism in energy was never really about the fuel source itself. It was always about who controls financing, ownership, and the terms of dependency. A centralized coal plant and a centralized “green hydrogen” megaproject can both reproduce the same structures of oppression. A solar home system paid off in installments by the household that uses it cannot, because there’s no foreign creditor in the loop to begin with.
That’s the real reason solar matters here, and it’s a narrower, more useful claim than “renewables will liberate the Global South.” There isn’t one template for breaking the old patterns of neocolonialism. Nigeria and Rwanda are doing it by decentralizing ownership down to the individual village level. Mexico is doing it by locking the state’s ownership stake into the fundamental laws of the nation itself. Both are answers to the same question: who holds the leverage once the financing closes. Neither model removes the underlying problem of unequal access to capital on its own, and both come with real trade-offs. Closing the gap between nations is unfortunately still a financing and policy fight, not a technology one. But for the first time in a long time, developing nations have a fighting chance to dictate the rules on their terms.
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