Africa-Press – Zimbabwe. Investment Guarantee Agency (MIGA) Africa Regional Head , Nkem Onwuamaegbu, says investors in Africa’s energy sector face significant non-commercial risks, including unpredictable regulations and financially weak public utilities, which can make long-term projects difficult to finance.
Despite surging interest in Africa’s energy markets, investors still face regulatory volatility, and the weak balance sheets of public utilities that make long-term project financing difficult.
This was revealed during a high-level panel discussion led by Onwuamaegbu at the Africa Investment Forum Market Days 2025 being held in Rabat, Morocco.
“Some of the risks that investors, especially in the energy sector, are facing is because we have been created and set up to try and mitigate what we call ‘non-commercial risks. And a lot of what you’ve heard is beyond the control of a sector investor that is coming into the market that may not have a predictable regulatory environment that gives them confidence to essentially make investments for a very long term,” she said.
“In many cases, when we’re talking about IPPs (independent power producers) in Africa, it’s through public utilities that don’t have strong balance sheets to give the investors and, importantly, the financiers that confirm that on a project finance basis, the project is well bankable, and this is where I and the World Bank group have typically come in with various key risk solutions.”
Miga, an agency of the World Bank, brings together guarantee products and experts from across the International Finance Corporation, MIGA, and the World Bank.
This integration enhances efficiency, simplicity, and speed in delivering guarantee solutions.
In the case of energy, Onwuamaegbu said it currently accounted for almost 30% of MIGA’s exposure in Africa, utilising the key risks such as breach of contract and the offtake risk, as well as currency transfer restriction and convertibility risks.
She highlighted that lots of risks in Africa, including political risk and an uncertain regulatory environment, can lead to uncertainty from an investor’s point of view.
Consequently, Onwuamaegbu revealed that most independent power projects (IPPs) in Africa still rely on public utilities that lack the financial strength required to give lenders certainty.
“In many cases when we’re talking about IPPs in Africa, it’s through public utilities that don’t have strong balance sheets to give the investors and, importantly, the financiers that comfort that… the project is well bankable,” she said.
To address investor fears, she said the agency backs a range of risks, including breach of contract related to power-offtake agreements, currency transfer restrictions, convertibility risk, political violence, and regulatory uncertainty.
She pointed to working with APA Power and EMEA Power as practical examples of where Miga has stepped in to help de-risk complex projects.
As part of its effort to accelerate delivery, Miga has introduced what she described as “a new innovative way to… hopefully make our DFI (development finance institution) process more efficient through a portfolio kind of approach.”
She referenced Tunisia’s platform-based IPP rollout, which uses uniform contractual structures to streamline transactions.
Onwuamaegbu also outlined the World Bank Group’s new Guarantee Platform, which consolidates all guarantee products previously spread across different World Bank units.
“That group now sits under the World Bank Guarantee Platform, which is housed within Miga,” she said.
“This then gives us the ability to use all the instruments against the need for the client.”
She encouraged African governments to work with the platform so that projects can be supported with “the optimal toolkit” to address investor concerns and unlock private capital.
She also referenced Mission 300, a joint World Bank–African Development Bank initiative aimed at reaching half of Africa’s 600 million unelectrified people.
“The initiative’s five-pillar contractual framework,” she said, “directly targets many of the issues developers have identified.”
“How the countries will be doing in meeting their contracts will be a huge indicator for investors,” Onwuamaegbu added.
However, she noted, improvements “will further facilitate investment.”
For More News And Analysis About Zimbabwe Follow Africa-Press
