LAGOS, Nigeria (XOL Africa) — Nigeria attracted $2.4 billion in renewable energy investment in 2025, making it Africa’s largest market for small-scale solar and highlighting the growing shift toward decentralized power as households and businesses seek alternatives to unreliable electricity grids and rising fuel costs.
The findings were contained in BloombergNEF’s latest Sub-Saharan Africa Clean Energy Market Outlook, which said the region attracted $13.5 billion in renewable energy investment last year. The figure was slightly below the $13.8 billion recorded in 2024 but marked the third consecutive year that annual clean energy investment exceeded $12 billion.
Investment increasingly shifted toward distributed solar systems serving households, commercial users and small businesses.
South Africa remained Africa’s largest renewable energy investment destination, attracting $20.4 billion between 2023 and 2025. Nigeria ranked second with $5.4 billion, followed by Kenya with $4.3 billion, Senegal with $1.8 billion, Namibia with $1.2 billion, Angola with $993 million, the Democratic Republic of Congo with $874 million and Tanzania with $776 million.
Solar remained the dominant renewable energy technology in sub-Saharan Africa, accounting for $10.9 billion, or more than four-fifths of total renewable energy investment in 2025.
“Solar continues to be the technology of choice across Sub-Saharan Africa,” BNEF said. “Of the $13.5 billion invested in 2025, solar accounted for $10.9 billion, a record for annual solar investment in the region.”
Investment in small-scale solar more than doubled during the year, rising from $3.4 billion in 2024 to $8.5 billion in 2025, according to the report.
Nigeria accounted for the largest share, with $2.4 billion invested in small-scale solar, ahead of South Africa with $1.5 billion and Kenya with $840 million.
More than 99% of Nigeria’s renewable energy investment in 2025 went into small-scale solar projects, reflecting the relative ease of financing decentralized systems compared with utility-scale developments.
“In Nigeria, the only other market with over $1 billion invested in 2025, more than 99 per cent of the $2.4 billion invested was in small-scale solar, as high capital costs and a lack of bankable off-takers continue to constrain utility-scale renewable energy projects,” BNEF said.
The trend comes as millions of Nigerian households and businesses increasingly turn to rooftop solar and battery storage to reduce dependence on diesel generators and an unreliable public power supply. Rising diesel and gasoline costs have further increased demand for alternative electricity sources, particularly among commercial users.
Despite the growth of distributed solar, investment in utility-scale renewable energy projects across sub-Saharan Africa fell to $4.3 billion in 2025 from $5.1 billion a year earlier, largely because fewer large-scale solar and wind projects reached financial close.
Corporate investment in renewable energy continued to grow, with companies backing projects worth $10.5 billion since 2024. South Africa accounted for 94% of that investment, while Zambia, Ghana and the Democratic Republic of Congo also recorded increased private-sector participation.
BNEF said South Africa’s established renewable energy procurement framework continues to support utility-scale projects, while Nigeria faces financing constraints, policy uncertainty and limited access to affordable capital.
The report projects that Nigeria’s installed electricity generation capacity will rise from about 20 gigawatts to 30 gigawatts by 2030, with renewable energy expected to account for 30% of total installed capacity.
Solar capacity is forecast to increase from 2.4 gigawatts in 2026 to 7.8 gigawatts by 2030 and 16.2 gigawatts by 2035 as investment in distributed generation accelerates.
However, BNEF identified financing as the biggest obstacle to Nigeria’s renewable energy transition. With the country’s benchmark interest rate at 27%, local-currency borrowing remains prohibitively expensive for many capital-intensive renewable energy projects, leaving developers heavily dependent on foreign investors and development finance institutions.
The report said high borrowing costs have limited the ability of Nigerian financial institutions to finance large renewable energy projects, putting the country at a disadvantage compared with markets such as South Africa, Namibia and Senegal, where domestic financing conditions are more favorable.
BNEF also linked renewable energy expansion to broader economic growth, forecasting that Nigeria’s economy will grow by more than 4% through 2028, supported by stronger services activity and increased refining output from the Dangote Refinery.
The report highlighted sub-Saharan Africa’s expanding role in the global renewable energy supply chain, noting that the region recorded the fastest year-over-year growth in Chinese solar imports between the first quarter of 2025 and the first quarter of 2026.
The region’s share of China’s global solar exports doubled from about 5% to 10% during the period, driven by rising electricity costs, persistent grid reliability problems and growing demand for backup power systems.
