Cape Town, South Africa — Regional electricity integration could be a game-changer for Africa, helping countries address persistent electricity challenges and attract investment in energy infrastructure, according to the African Energy Chamber’s State of African Energy 2026 Outlook. By developing larger, interconnected markets, nations can create alternative offtake solutions, reduce project risks and enable economies of scale. Five regional power pools have been established across the continent – Southern Africa, Eastern Africa, Western Africa, Central Africa and North Africa – to facilitate cross-border electricity trade, share resources and coordinate energy policies.
The Outlook notes that the Southern African Power Pool (SAPP) stands out as the most advanced. Its robust institutional framework, high degree of grid interconnection and transparent electricity market have enabled efficient trading and optimized resource use. SAPP serves as a model for regional integration, allowing member countries to benefit from reliable power exchanges and a diversified generation mix. Yet, even here, challenges remain: trading remains limited relative to total demand, liquidity is low and transmission constraints persist, highlighting the need for continued investment and market development.
West Africa’s power integration also shows promise. The Outlook highlights WAPP’s progress in expanding cross-border connections and increasing electricity trade, while noting that growth is constrained by incomplete grid links, regulatory fragmentation and financial issues such as payment arrears. Similarly, the Eastern Africa Power Pool is advancing through large-scale interconnection projects, but its development is slowed by political and regulatory fragmentation, infrastructure gaps and occasional security tensions. The Central African Power Pool remains the least developed, with minimal cross-border trade and limited infrastructure.
North Africa presents a contrasting picture: the region has some of Africa’s most advanced infrastructure, yet electricity trade is limited because countries primarily pursue bilateral agreements or focus on Europe-bound exports rather than intra-African integration. The Outlook emphasizes that across all regions, the African Union’s African Single Electricity Market aims to harmonize standards, regulatory frameworks and planning to create the world’s largest electricity market by 2040. Achieving this vision faces significant hurdles, including vast distances, technical incompatibilities, infrastructure needs, political fragmentation and differing national interests.
Even within the relatively mature SAPP, the Outlook identifies additional work needed to unlock market potential. Market liquidity remains a major constraint: in 2023, only 7.7 TWh was traded over the SAPP, compared with total demand of 344 TWh – roughly 2%. Around 80% of this trade comes from bilateral contracts, with just 13% conducted through the day-ahead market (DAM). In contrast, mature European markets trade more than 24% of physical consumption through DAMs, illustrating how limited trading scale in SAPP restricts its ability to stabilize the network. Transmission congestion also constrains trade: although blocked trades in the DAM fell from over 40% before 2018 to 1.3%, the Outlook notes this improvement reflects reduced activity rather than enhanced infrastructure. Addressing funding gaps and improving wheeling tariffs are critical to enabling the power pool to function at full potential.
The Outlook also highlights financing as a central issue across Africa, where public debt and fiscal constraints limit governments’ ability to fund large infrastructure projects. Innovative approaches such as public-private partnerships have emerged as vital tools for bridging these gaps. The Outlook identifies four main models for private-sector participation in transmission projects: Build-Own-Operate; Build-Own-Operate-Transfer; Build-Transfer-Operate; and Engineering, Procurement, Construction and Finance. Examples cited include the Kigali Power Transmission Project in Rwanda and the CLSG interconnector linking Ivory Coast, Liberia, Sierra Leone and Guinea, funded by multilateral institutions and regional governments.
“By leveraging private investment alongside government support, these frameworks can mobilize capital, technology and expertise to construct and operate critical transmission infrastructure,” says NJ Ayuk, Executive Chairman, African Energy Chamber, adding that regional electricity integration offers clear potential to lower costs, improve reliability and attract investment, “laying the foundation for a more secure, efficient and renewable-powered Africa.”
