Why Bankability Is Africa's Next Energy Priority
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Bankability is becoming the defining factor in Africa's energy investment landscape. With the continent's annual energy financing gap estimated at between $31.5 billion and $45 billion, the challenge is increasingly less about resource potential than commercial readiness. Gas supply agreements, long-term offtake contracts, creditworthy counterparties and robust financing structures are becoming the factors that determine which projects reach financial close – and which remain on the drawing board.
Long-term Supply Agreements De-Risk Major Projects
Recent developments across the continent suggest that bankability has become the industry's new competitive advantage. Last week, Nigeria's UTM Offshore FLNG project signed a 15-year gas supply agreement with a joint venture between NNPC and Seplat Energy for 200 million standard cubic feet of gas per day from the Yoho field, removing one of the final commercial hurdles ahead of a final investment decision expected in the fourth quarter of 2026.
The agreement builds on several years of project de-risking. Front-End Engineering Design has already been completed by JGC and Technip Energies, financing support has been secured from Afreximbank, and equity commitments have been provided by NNPC and the Delta State Government. Together, these elements create the commercial structure lenders typically require before committing capital to a project of this scale. Once operational, the $3 billion facility is expected to produce 1.8 million tonnes of LNG annually, alongside 300,000 tons of LPG for Nigeria's domestic market.
Offtake Certainty Accelerates Financial Close
The same pattern is emerging elsewhere. Mozambique's Coral Norte FLNG reached a final investment decision in late 2025 on the back of long-term LNG sales agreements and experienced project sponsors. In South Africa, a 300 MW solar-plus-storage project secured financial close through 25-year power purchase agreements with industrial offtakers Sasol and Air Liquide.
Zambia's Ilute Solar Project unlocked financing through a market-based power purchase agreement with GreenCo Power Services, whose credit-backed model helps reduce payment risk for investors. Across these projects, the commercial framework preceded the capital commitment, reinforcing that revenue certainty has become a primary condition for unlocking investment.
African-Led Financing Institutions Create New Pathways
At the same time, African financial institutions are expanding the tools available to support project development. The African Energy Bank, established by the African Petroleum Producers Organization and Afreximbank with $5 billion in initial capital, aims to deploy $10 billion during its first phase across Nigeria, Angola and Libya. Elsewhere, blended finance mechanisms from institutions including the IFC and Afreximbank, alongside credit guarantee programs in South Africa, are helping lower financing costs and crowd in private investment.
These instruments are important, but they do not replace strong project fundamentals. Development finance can reduce risk, but lenders still expect projects to demonstrate secure feedstock, reliable revenue streams, regulatory certainty and credible sponsors before capital is deployed.
Returning to Paris on 11–13 May 2027, Invest in African Energy (IAE) will bring together governments, national oil companies, developers and financiers to focus on the commercial foundations that underpin successful projects. Through initiatives including its G2B Investment Origination Day, Transaction Suite and Investor Circles, the forum is designed to facilitate discussions around licensing opportunities, financing structures, gas supply agreements, offtake arrangements and infrastructure partnerships.
As competition for global energy capital intensifies, Africa's resource base remains one of its strongest advantages. Increasingly, however, it is the quality of a project's commercial structure – not simply the scale of its reserves – that will determine whether investment follows.