by Ben Holland, Absa Resources; Energy Banker: US Corridor and Russel Timbe, Absa Resources; Energy Banker

When New York-based energy firm Hydro-Link partnered last year with Swiss infrastructure group Mitrelli to develop a 1,150-kilometre transmission line between Angola and the Democratic Republic of Congo, the logic behind the investment was difficult to miss. Valued at roughly US$1.5 billion, the project is designed to move surplus hydropower from Angola into the energy-constrained copperbelt region of southeastern DRC, where electricity shortages continue to disrupt mining and processing operations tied to some of the world’s most strategically important critical minerals deposits.

What makes this particularly interesting is that it is one of the clearest of many examples pointing to a broader pattern emerging across parts of Africa’s energy sector, where investment, both local and foreign, is gravitating towards power infrastructure linked to large industrial demand centres capable of supporting long-term offtake, especially in mining, mineral processing, manufacturing, logistics corridors, technology, and the wider industrial activity developing around them.

None of this suggests investor appetite for renewable energy is waning; if anything, private capital flows into African clean energy projects have rebounded over the last few years, with the International Energy Agency (IEA) estimating investment rose from roughly US$17 billion in 2019 to almost US$40 billion in 2024.

What is changing, however, is where that capital is looking for certainty, regardless of the scale of the opportunity. Energy investors are more likely to enter new markets, but opportunities will be increasingly centred on robust commercial and industrial offtake, sensible regulatory and tariff regimes, and a diversified portfolio approach.

There is no doubt that international capital still wants exposure to the continent’s energy markets, but the investment logic appears much more commercially disciplined now, with greater attention being paid to the broader economic activity underlying that power demand over the long term.

Perhaps one of the more interesting longer-term questions surfacing around this logic in conversations with investors, especially those in the United States and China, is what happens as Africa’s data-centre market starts scaling more aggressively alongside the growth of AI and hyperscale computing infrastructure, both of which require enormous and highly reliable power supply. If digital infrastructure is going to grow meaningfully on the continent, then the energy required to sustain it inevitably becomes part of the investment case as well.

McKinsey estimates that African data-centre capacity demand could reach between 1.5 GW and 2.2 GW by 2030, potentially catalysing between US$10 billion and US$20 billion in investment across the continent, with the energy infrastructure required to support that growth likely to attract billions more in associated capital. Many operators are already trying to solve for this themselves, even if not yet at the scale likely to be required over time. Mining companies, manufacturers, and increasingly data-centre operators are investing directly in dedicated energy supply as reliable electricity becomes a competitive necessity. In South Africa, for example, data-centre operator Teraco has begun construction of a 120 MW solar PV project in the Free State while also securing additional renewable wind energy supply through long-term power purchase agreements for its operations.

But there is much ground to cover.

Recently, Kenyan President William Ruto revealed that a proposed US$1 billion hyperscale data-centre project involving Microsoft and UAE-based G42 had encountered a major constraint around power availability. The first phase alone required roughly 100 MW, with plans to scale towards 1 GW over time, an enormous requirement in a country whose effective grid capacity at the time stood at roughly 2.4 GW. As Ruto himself put it, powering a single hyperscale facility at that scale would effectively require ‘shutting down the whole country.’
That is part of what is drawing attention towards countries with larger and more diversified energy mixes capable of supporting demand at that scale over the long term. Markets such as Angola and Mozambique, with significant hydro and gas resources alongside wider energy export potential, are increasingly entering those conversations for that reason. It is also drawing attention towards economic corridors such as the Lobito Corridor, where investment exposure can be spread across multiple jurisdictions, sectors, and energy systems rather than concentrated around a single market or asset.

This is changing the way investors think about risk.

Concentrating exposure around a single asset or one operating environment leaves very little room when conditions change, and investors are instead looking at how exposure can be spread across different markets, different energy mixes, and different types of demand in ways that create a more resilient long-term investment proposition. And it is in these differences that navigating the breadth of opportunities across 54 countries becomes profoundly difficult, with investors entering from outside often realising too late that many of the assumptions and templates that worked in Europe, Asia, or the United States do not always translate neatly on the continent. That is making domestic partnerships far more important today. Whether through banks or other institutions already embedded within local environments, investors now need partners capable of helping them traverse the conditions surrounding projects at a country or regional level before capital is committed at scale.

Africa’s long-term energy opportunity is less likely to depend on isolated generation assets than on the ability to connect reliable power to concentrated industrial demand.

A megawatt connected to weak demand is a very different proposition to one connected to energy-intensive economic activity whose own competitiveness depends on stable electricity supply. That is where much of the first-mover advantage may be for international investors and financiers able to identify those linkages early enough.

by Cheryl Buss, Chief Executive, Absa International

A view that surfaced repeatedly during the Africa Debate in London this month was that Africa may be undergoing a shift in its trade and investment paradigm. It is the sort of phrase that often attracts healthy scepticism, partly because every period of disruption tends to produce predictions of a new era with a new set of rules. But what made this particular proposition difficult to dismiss was the extent to which it appeared across conversations that were otherwise very different in nature.

During a panel I had the privilege of moderating, bringing together voices from trade policy, development finance, regional economic governance, and international investment, the discussion kept returning to a similar observation: that some of the macroeconomic and geopolitical headwinds creating uncertainty across the global economy may also be fundamentally changing the way investors think about Africa’s place within it. And perhaps more importantly, how Africa thinks of itself.

The question, of course, is whether this really amounts to a paradigm shift at all.

One could argue that the continent’s trade and investment landscape has been evolving for decades, but for much of that time economic development was largely pursued through national self-determination, advancing in a piecemeal fashion from one market to the next. Fragmentation has consequences. Capital tends to pool in familiar destinations, reinforcing established investment corridors while leaving opportunities elsewhere competing for attention. It can also limit resilience when external shocks occur, a reality once again brought into focus by recent tensions in the Middle East and the disruption of one of the world’s most strategically important trade routes, alongside the volatility created by new tariff regimes in the United States and shifting trade policies across some of the world’s largest economies.

But those same pressures are also creating opportunities for Africa to reposition itself. Growing competition for the critical minerals underpinning the energy transition has increased the continent’s strategic importance within global trade and industrial supply chains, giving it greater influence over how future economic relationships are structured.

Determining whether a new paradigm is emerging now therefore requires looking at the issue through two distinct lenses: principle and practice. Practice is perhaps the easier of the two, because it is ultimately reflected in market behaviour. If a new paradigm is emerging, it should be evident in where capital is flowing, who is deploying it, and what opportunities are attracting attention. On all three fronts, there are indications that something is changing.

Consider the United States. U.S.-Africa trade reached almost $105 billion in 2024, yet much of the current conversation is dominated by uncertainty surrounding the future of AGOA, the programme that has underpinned much of the relationship for the past quarter century. Its temporary lapse in 2025, subsequent short-term reinstatement, and ongoing debate around what comes next arguably say as much about how Africa’s position has changed as it does about America’s. The era in which access to a single major market could define the continent’s trade and investment proposition is steadily giving way to one in which African policymakers and business leaders are managing a growing portfolio of commercial partnerships spanning China, Europe, the Gulf states and an expanding group of middle powers, each competing for influence and access.

This is not to say that appetite from the U.S. private sector has been lost, nor that Africa’s interest in the relationship has diminished. There is still strong interest from many of our own clients at Absa looking to trade and invest across the continent, but what has changed, at least in part, is a perception of heightened risk and a growing demand for guidance on how best to navigate it.

China, meanwhile, has capitalised on these challenges, with Beijing’s recent decision to extend zero-tariff access to a wide range of African exports expected to strengthen its position as the continent’s largest single-country trading partner following record bilateral trade of $275 billion in 2024. Yet here too, the relationship is changing. From Absa’s engagements with clients and policymakers globally and across Africa, it is clear the continent is seeking to leverage the aforementioned disruption by establishing trade and investment engagement on stronger terms. The ask is for greater participation in industrial value creation, and while the energy transition is creating new areas of commercial interest that extend beyond traditional infrastructure and extractives, engineering, procurement and construction (EPC) arrangements are becoming a more prominent feature of the relationship, sitting alongside trade and technology exports in ways that would have looked quite different a decade ago.

Competition from China has also arguably forced a more deliberate European response, with initiatives such as Global Gateway recognising Africa’s trade and investment potential in the context of a more regionalised global market. But while the EU has moved to position itself as a long-term investment partner, progress on the trade side of the relationship has been less pronounced, with trade from several major European economies stagnating over the last decade, in part because the policy architecture has not always kept pace with the ambition of the relationship. Without deeper bilateral arrangements with key African economies, Europe risks having the language of partnership without the commercial machinery to match it.

On the other hand, the Gulf states have become one to watch. Over a relatively short period of time, the United Arab Emirates, for example, has established itself as one of the continent’s most active economic partners, recently becoming the largest backer of new business projects in Africa. What makes this particularly noteworthy is not only the scale of capital being deployed, but the speed at which new trade relationships are being formed. The UAE now ranks among the most important export destinations for several African economies, including Zimbabwe and Uganda, illustrating how quickly the geography of Africa’s external economic relationships can change.

Much of the UAE’s engagement with Africa has been driven through state-backed investment and public-private partnerships, although private-sector participation has also grown considerably in recent years, leaving significant scope for broader engagement across a wider range of sectors and markets. What we have noted from our engagements with clients is that one area attracting particular attention is the UAE’s large family business sector. These enterprises have long played a central role in the Emirati economy, and there are signs that many are beginning to look beyond traditional markets as they explore opportunities across a wider range of African countries.

These are indications that a new paradigm may be emerging. Trade and investment activity is becoming more diverse, both in terms of who is participating and where interest is being directed. But whether this can evolve into something more meaningful depends on whether the principles needed to support it are also falling into place.

Perhaps the clearest example of this is the African Continental Free Trade Area. As of 2025, 49 countries had deposited their instruments of ratification, more than 40 had submitted tariff offers, service liberalisation had begun across five priority sectors, and thousands of AfCFTA certificates of origin had already been issued. Intra-African trade grew by 12.4% in 2024 to more than $220 billion, a development many see as evidence that the agreement is beginning to gain traction.

The detail, and ultimately the success, however, is in the execution. Africa still accounts for only around 3% of global trade, while intra-African trade represents just 14.4% of the continent’s formal trade. Those figures speak to the scale of the task ahead and the need to move beyond policy ambition towards the effective implementation of the mechanisms required to support trade both within Africa and beyond it. For example, if there is one lesson that has emerged repeatedly from conversations across the trade and investment community, it is that there needs to be a deliberate focus on both hard infrastructure and addressing the factors that contribute to the continent’s risk premium.

For all their differences, many of the reforms taking place across the continent are underpinned by a similar idea: that Africa is likely to carry more economic weight together than it does in parts. The pace at which integration efforts have advanced over the last decade suggests that this is no longer an aspiration, but an important organising principle for how the continent engages the global economy.

As for the question that sat at the centre of so many discussions at the Africa Debate, the answer is that Africa is indeed entering a new trade and investment paradigm, albeit one that is still in transition. The activity is there and the institutional foundations are beginning to take shape. If the trajectory holds, it may prove to be one of the most consequential economic shifts in the continent’s modern history.

Lane Mogashoa, Business Development Support -Enterprise Development, Absa Business Banking

When Chantelle de Bruyn’s grandfather had to give up coffee for health reasons, she wondered whether she could create something that would still give him the experience of having a cup. She found a peculiar answer in butternut, although turning that idea into a product people would actually drink took far more than inspiration.

The Free State entrepreneur registered Buttercup Farmhouse in 2019, completed short online courses in biochemistry and approached the University of the Free State’s Food Science Lab for help. Over the next three years, the product was tested and refined until it was ready for market and, by 2024, the coffee alternative that had started with one person’s health challenge had found its way onto the shelves of major retailers.

De Bruyn credits part of that progress to the funding and mentorship she received along the way, which helped her scale the business, enter new markets and build a stronger understanding of financial management. Through Absa, she received a business development grant and access to a lending facility, along with opportunities to showcase her products at Lemo Fest and on the Proudly South African platform. This exposure helped her reach wider markets, supported by marketing assistance and broader business development support.

Her experience points to something that is missed in the conversation about SME development more broadly. Capital matters, but every growing business also depends on the capability to use it well and a clear route into the market. For women entrepreneurs, access to that wider business ecosystem is often less equal, which means funding alone may leave many of the barriers to growth untouched.

According to the Small Business Growth Index, South Africa’s first real-time barometer of the conditions shaping small business performance, only 38% of businesses surveyed in 2025 believed they could survive for more than a year under sustained cost pressure without external support. There is clearly a funding gap, because small businesses account for much of the country’s entrepreneurial activity and need capital if they are to grow into larger, more productive enterprises. But funding is still treated as the end point, when in reality it is only one half of the problem, especially for women-owned businesses trying to move from survival into sustained growth.

The way we think about SME development for women-owned enterprises needs to become more holistic.

A business can receive funding and still struggle because the owner does not yet have the systems or commercial relationships needed to use that capital well. We see versions of this with clients all the time at Absa. An entrepreneur may have a strong product and a growing customer base, but the business records are still mixed with personal finances, invoices are not followed up consistently, and the owner does not have a clear view of what the business earns after costs. A lender looking at that business sees uncertainty, even where the underlying enterprise has real potential.

Research in South Africa has also found that women entrepreneurs face weaker market linkages and are concentrated in sectors where businesses tend to be smaller, which affects the type of finance they can access and the pace at which they can grow. Programmes that combine finance with ongoing mentorship and a real route into the market have been shown to achieve better results than support offered in isolation, which is why South Africa needs more initiatives that stay with the entrepreneur as the business develops. The strongest programmes work alongside the business long enough to help the owner understand what is holding it back, fix that problem and then move with greater confidence into the next stage of growth.

Market access is particularly important because a business cannot train its way around the absence of customers. This is where large companies and public institutions can make a direct difference by giving women-owned SMEs a realistic route into their supply chains and then helping them understand what is required to remain there.

One such example is an Enterprise Development Programme developed through a partnership between Absa and SME incubator MyDough. It is designed to support 100 South African entrepreneurs, especially women, through business development support, mentorship and coaching, creating market access opportunities and providing support towards funding readiness and access to funding.

Initiatives like these do not reduce the urgency of closing the funding gap, but they do change what successful funding should look like. The aim is to help more women-owned businesses reach the point where they can take on capital and turn it into sustained growth. That will require finance and business development to be treated as part of the same journey, because that is how the entrepreneur experiences them.

By Denver Fortuin, Chief Risk Officer Absa Insurance at Absa Group

Six months on from South African regulators putting in place a more structured approach to climate-related disclosure for insurers, expectations have begun to tighten in line with how other markets are approaching the same issue, with these risks now treated as having direct financial consequences for the sector. But while the case for doing so is clear, working through what this requires in practice will take time and will depend on the industry engaging more closely as it builds the capability to meet it.

In October last year, the Prudential Authority issued updated guidance on climate-related disclosures for insurers, grounding it more firmly in both international and domestic frameworks to align with global standards and reflect the move toward more consistent reporting, drawing on developments such as the G20’s Task Force on Climate-related Financial Disclosures and the International Financial Reporting Standards’ sustainability standards, while adapting the guidance to South Africa’s context.

The move comes from the recognition that climate change and the transition to a low-carbon, climate-resilient economy can affect the safety and soundness of financial institutions and the stability of the financial system, a reality that is particularly relevant in South Africa given its exposure to climate-related disasters such as droughts, floods, and wildfires, as well as transition risks linked to its reliance on fossil fuels for electricity, export revenues, and employment. There is broad agreement that rising global temperatures will influence the frequency and severity of weather-related events, with a growing share of natural catastrophe losses linked to these changes. For insurers, particularly those exposed to property and casualty risks, this places greater weight on how climate-related risks are assessed, priced, and managed.

At its core, the Prudential Authority expects insurers to treat climate disclosure as part of financial reporting.

Insurers are expected to show, among others, how climate risk is governed at board and management level, how it affects strategy, financial planning, and the value chain over defined time horizons, and how scenario analysis informs this. Climate risk must be integrated into existing risk management processes and firms must also quantify exposure and progress through appropriate metrics and targets, linked where relevant to remuneration, with disclosures grounded in local context and supported by internal controls.

But widescale implementation is easier said than done.

The guidance assumes insurers have access to granular, reliable climate data, yet emissions data from clients and investee companies is often incomplete, and local climate projections are still limited. Many insurers still rely on catastrophe models based on historical patterns, which do not fully capture how risks may evolve, introducing uncertainty into metrics and scenario analysis. At the same time, the skills required to interpret this information are not yet widely embedded. Much of this sits outside the traditional capabilities of many insurers, particularly smaller or newer entrants, and will require building expertise over time, whether internally or with external support. Embedding these considerations into how the business operates will also require internal change, including how boards engage and how policies and systems are structured.

These adjustments carry cost, and the ability to absorb that cost will differ across firms, and as a result, disclosures are likely to reflect varying levels of maturity, affecting consistency and comparability across the sector.

The constraints are shared, particularly where data is incomplete and capability is still developing, and progress will depend on how the industry works together to close those gaps, through closer coordination between insurers, regulators, and other stakeholders to improve the availability of usable data and bring more consistency to how climate risk is measured and disclosed – and this process cannot be deferred.

The Prudential Authority is clear that insurers are expected to begin now rather than wait for it to be legislated. Building the systems and internal capability needed for credible disclosure takes time, and it is more practical to do this steadily than under pressure. Judging by past experience with similar guidance, climate-related disclosures are likely to become mandatory, and the task now is to be ready for that.