De-risking is key to bankable energy projects in Africa – Deloitte Africa partner

By Eugene Davis

Yaw Appiah Lartey, Partner – Strategy and Transactions, and Africa Infrastructure and Capital Projects Leader at Deloitte Africa, believes that de-risking energy projects is critical to attracting investment and securing commitments from financial institutions.

Speaking at the Future of Energy Conference on the bankability of energy projects, he noted that even in Africa’s high-risk markets, clean energy initiatives can attract capital when ideas are translated into structured, de-risked, and impact-driven opportunities. “The path to bankability lies in blending innovation with risk mitigation, strong partnerships, and alignment with both investor expectations and local realities,” he stated.

According to Appiah Lartey, bankable projects must pass through key stages:

Idea validation and feasibility studies – governments and stakeholders should conduct thorough resource assessments (solar, wind, hydro) and review policy frameworks. IRENA (2022) reports that over 60% of failed African energy projects stem from weak feasibility studies. He cited Kenya’s Lake Turkana Wind Power Project—365 turbines (850KW each), a high-voltage substation, and a 438km transmission line to the national grid—as a success built on detailed wind mapping.

Structuring the business model and securing early commitments – engaging governments, utilities, Development Finance Institutions (DFIs), and anchor off-takers. Early commitments from institutions such as the IFC and AfDB can de-risk private capital.

Bankable documentation, investor pitching, and financial close.

He noted that over 70% of African energy projects are structured as Public-Private Partnerships (PPPs). A notable example is Ghana’s Bui Dam—a 400MW hydroelectric project on the Black Volta, developed through a PPP between the Government of Ghana and Sino Hydro, a Chinese state-owned construction company.

Barriers to financing

Appiah Lartey highlighted challenges including bureaucracy, regulatory bottlenecks, corruption, taxes and tariffs, lack of financing options, technical and equipment gaps, shortage of skilled labour, limited private sector involvement, policy uncertainties, weak community engagement, and inadequate budget allocations.

De-risking tools and innovative financing

He outlined strategies such as blended finance (concessional + commercial capital), political risk insurance (MIGA, ATI), currency hedging mechanisms, government guarantees, credit enhancements, and stronger community engagement for project sustainability.

On financing innovations, he pointed to mechanisms like diaspora bonds, structured finance, collective ownership models, green bonds, carbon finance, impact investments, sustainability-linked loans, and solidarity taxes.

The conference reinforced that Africa’s energy future must rest on partnerships, inclusive financing, and strong institutions—with the ultimate goal of building sustainable, competitive, and resilient energy systems that drive the continent’s economic transformation.