Finance will play a key role in helping Africa’s information and communication technology (ICT) sector grow while reducing its carbon footprint.

“As Africa’s ICT sector grows – connecting millions of people, powering digital economies and enabling the services that underpin modern life – a pressing question looms: How do we continue to expand this critical digitalisation while moving to a low-carbon future?” Vodacom Group CFO Raisibe Morathi muses.

Reliable, affordable energy remains the first priority for many African economies, and decarbonisation must support, not compromise, that objective, she adds.

Ensuring connectivity is energy-intensive, and renewable-energy investment, public- private partnerships (PPPs), power purchase agreements (PPAs) and new funding models are needed to make clean energy projects more practical and affordable across the continent.

Utility-grade renewable-energy projects, which are supported by transmission and distribution infrastructure, are essential to decarbonising Africa’s electricity systems. However, these types of renewable projects require substantial upfront capital and often involve long development cycles before returns materialise.

“In many African markets, those risks are amplified by currency volatility, high interest rates, underdeveloped capital markets, policy uncertainty, and the fragile financial health of many State-owned utilities,” says Morathi.

While utility-scale projects are vital, thousands of mobile base stations operate in areas and communities where utility power is unreliable or absent, with mobile networks able to support wider energy access.

By leveraging base stations as steady power, telecommunications companies like Vodacom can help make mini-grid projects more attractive to investors, while bringing clean energy closer to businesses and households.

Mini-grids, emerging as a practical way to expand both electricity access and digital inclusion simultaneously, are viewed as problematic within traditional financing models.

Many projects are too small to justify the transaction costs associated with extensive due diligence, while revenue streams can appear uncertain, subsidy frameworks inconsistent and regulatory protections limited.

As a result, projects with developmental potential often struggle to attract affordable capital.

However, a telecommunications base station, as an anchor customer, provides predictable and continuous demand for electricity, which can stabilise revenues, improve project bankability and enable developers to secure better financing terms.

Once power infrastructure is established, surrounding businesses and communities often benefit as well through the creation of local economic ecosystems that reinforce both energy access and digital participation.

“This is where innovative financing and collaboration are indispensable to the net zero journey. Mechanisms such as PPAs and blended finance models, alongside enablers like independent power producers (IPPs) and PPPs, play a critical role in de-risking projects and improving their overall financial viability,” explains Morathi.

Development finance institutions further support this ecosystem by partnering alongside like-minded investors to assist with project development and financing for renewable energy projects.

The investment landscape is steadily shifting, she says, highlighting Vodacom’s Decarbonising Africa’s ICT Sector report, which revealed that, in 2023, $1.8-trillion was invested globally in renewable energy production.

Despite this, Africa’s share remains woefully inadequate, and yearly renewables investment needs to reach $4.5-trillion globally to stay on track with climate targets.

“The funding gap is nowhere more acute than here on our continent. To meet net zero ambitions, the ICT sector must overcome decarbonisation financing barriers through innovative funding models.”

Vodacom views the opportunity as significant.

“As a creditworthy corporate off-taker, we can sign PPAs with IPPs that provide the revenue certainty investors and lenders require. In doing so, we do not just secure clean energy for our own operations, but we actively enhance the bankability of projects that benefit the entire region.”

Newer financing approaches are gaining traction.

Energy service companies combine financing, implementation and performance guarantees, allowing businesses to repay investments over time through the savings generated.

Revolving credit facilities, concessional loans and sustainability-linked financing are also helping turn clean energy investments from large one-off capital decisions into more manageable operational expenditure models.

These mechanisms not only reduce risk but also accelerate adoption, allowing operators to scale efficiency and renewable solutions across their networks.

“At Vodacom, we know firsthand that the path to net zero depends heavily on electricity decarbonisation. Our networks rely on energy from a range of sources, including the grid and on-site power solutions, to operate base stations and data centres that keep our customers connected.”

Vodacom continues to explore and advance innovative models, such as its virtual wheeling project with South African utility Eskom, enabled by a platform developed by subsidiary Mezzanine and renewable energy from IPPs such as SOLA.

“This approach allows us to aggregate demand across our network and access renewable energy at scale.”

Connectivity is central to Africa’s economic future, but digital growth must be balanced with the transition to lower-carbon energy systems.

The continent needs an energy transition capable of supporting both development and decarbonisation simultaneously. Finance will determine whether this can happen at the scale and pace Africa requires, she concludes.