Mission 300 in Powering Africa – Is it Over Ambition?

Mission 300 in Powering Africa – Is it Over Ambition? On 27-28 January 2025, Tanzania hosted an exceptional summit ‘Africa Energy Summit – Mission 300’ which was jointly organized by the Government of Tanzania, the African Development Bank Group, the African Union and the World Bank Group (the World Bank) with focusing on ‘providing electricity access to 300 million people in Africa by 2030’, hence the grand name ‘Mission 300’. The World Bank on its site: https://www.worldbank.org/en/programs/energizing-africa/summit states that, aside from the Heads of Governments and high profile individuals who were in attendance, there were private sector leaders, development partners and civil society participants who attended the Summit showing willingness to participate and achieve the vision of ‘Mission 300’ by 2030.

Unlike previous energy events, the Summit commanded attention globally and within Tanzania as we witnessed for the first time Government employees in Dar es Salaam were requested to work from home during the two days. This is an undisputed proof that technology has revolutionized the way we work and energy i.e. electricity will revolutionize and open opportunities throughout Africa which will lead to economic growth at a large scale if Mission 300 is achieved as envisioned. I have written a number of short articles regarding the energy sector in Africa, including its challenges.

Whilst achieving ‘Mission 300’ is not impossible, it commands higher commitment by all the stakeholders including the African Governments, changing our perspective in support of the energy sector and undertake substantial changes to the existing frameworks to bring competitive edge which will attract more investors to the booming and promising Africa energy sector. Private sector plays a key role to ensure energy projects take off but the Governments in question must have inclusive and updated policies which are not shrouded with bureaucracy and taking a piece of the pie which isn’t cooked yet i.e. demanding a large portion of the proceeds long before construction and generation operations commence.

It is undisputed that Governments need to collect taxes from businesses but imposing and collecting taxes e.g. import tax, VAT, income tax etc. before construction and generation commences adds additional (and unnecessary) costs to the overall establishment of the energy facilities. My article titled ‘bankability of projects in Africa and challenges’1 highlights the challenges of financing projects in Africa. As an energy lawyer, I encounter private investors seeking to invest in energy projects in Africa, but most countries implement outdated policies which do not give confidence to the financiers of the project, let alone assuring the investors’ returns for establishing and managing these projects. Regardless of the wealth of the investor seeking to invest in the energy project, diversification of risk is critical.

It should be expected that the investor must share the costs and risks with the local and international banks and financial institutions and other private financiers. Energy policies and laws in African countries must change to consider the demands and needs of the ‘indispensable partner’ i.e. the banks and financial institutions to ensure success of the energy projects. It is unlikely that any financial institution, bank or private financier will be willing to finance an energy project particularly during the 1 https://www.linkedin.com/pulse/bankability-projects-africa-challenges-amalia-lui-hnnff?lipi=urn %3Ali%3Apage%3Ad_flagship3_series_entity%3BSbTNMQkuReqljTYFJs7%2FoQ%3D%3D

construction phase if large chunk of the facility goes to pay taxes e.g. import tax, VAT, income tax i.e. withholding tax and other government fees. Fiscal policies and frameworks should be amended to offer favorable investment terms for investors seeking to invest in the energy sector especially prior to generation phase. Whilst some African Governments have granted exemptions for these initial costs e.g. for capital goods etc., in practice, this is far from supportive to the new projects.

Also, the investors and their financiers have to jump through hoops either utilize the exemptions or they are required to pay the imposed taxes and wait for refunds e.g. in cases of VAT, which takes a considerable time to be implemented, and eventually the investor has to wait for generation to commence and undertake an offset of the taxes which shouldn’t have been paid during the construction and commissioning phases. Another roadblock to overcome and ensure success of ‘Mission 300’ is to adopt alternative financing as opposed to sticking to traditional project finance through Government funds or loans from banks and financial institutions. In my article titled ‘Fueling Africa’s Infrastructure Growth: Alternative Funding’, I discuss the alternative means of financing projects in Africa e.g.

FDIs, PPPs, blended finance i.e. use of public and private capital, Sovereign Wealth Funds, International Bond Markets, Angel Investors etc. Most African Governments have attempted to allow private sector to invest in the energy sector but most Governments still retain tight control on the energy sector projects. Involvement of Government in projects which have national impact is critical, but this should be limited to regulatory measures as opposed to insisting on equity and involvement in the internal operations of the energy companies. Also, regulatory frameworks should be made flexible to accommodate small and large investors because it is unlikely that one energy project can reach all communities in African countries meaning there has to be multiple players who work towards a common goal.

Small, medium and large scale energy projects should not be subject to the same regulatory conditions and controls and more leeway should be given to small and medium scale with minimum intervention from the Government. Finally, it is time for Governments to abandon bureaucracy in negotiations and execution of the PPAs and other ancillary agreements which negatively impacts most energy projects in Africa. Also, Governments should make sure that their national off takers are able to settle their financial obligations when they fall due.2 Finally, as we work towards accomplishing ‘Mission 300’ by 2030, we shouldn’t forget our commitment to reducing carbon emissions through energy transition. 3 The energy projects must take into account the necessity to ensure that we have clean energy.

Otherwise achieving ‘Mission 300’ will inevitably lead to an impending catastrophe and a flood of economic, social and political challenges due to increased carbon emissions, which leaves Africa, particularly sub-Saharan Africa in a predicament. I am of the view that Africa can achieve ‘Mission 300’ and it will open up opportunities across all sectors, and will play a key role to bring positive economic changes to individual Africans. However, the existing frameworks should be revised to accommodate the developments in the energy sector, be inclusive of the views and expectations of the key players and clearly defining the roles of each party, without forgetting to ensure a ‘win-win’ outcome for all parties involved.

2 https://www.clydeco.com/en/insights/2024/08/the-energy-sector-in-tanzania 3 https://www.linkedin.com/pulse/what-does-energy-transition-mean-africa-amalia-lui-tkjvf?lipi=urn %3Ali%3Apage%3Ad_flagship3_series_entity%3BSbTNMQkuReqljTYFJs7%2FoQ%3D%3D

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