By: Khushbu Ahlawat, Consulting Editor, GSDN
Africa’s energy problem has never really been a shortage of promises. In the fourteen years since the first big Western climate-finance package was unveiled for the continent, pledges have piled up faster than power lines. What has not kept pace is delivery. The International Energy Agency’s most recent World Energy Investment report puts a hard number on the gap: global energy spending is on track to hit roughly $3.4 trillion in 2026, and Africa — home to nearly a fifth of humanity — will capture only about 3 percent of it, some $110 billion, even as almost 590 million Africans still live without electricity. Closing the access gap alone would require an estimated $150 billion over the next decade, more than $15 billion a year; actual tracked financing for new connections has recently run below $2.5 billion annually. Against that backdrop, it is worth asking not just who is offering Africa money for its energy transition, but whose money is actually landing.
That question has become sharper in the past eighteen months because the most publicised Western answer — the Just Energy Transition Partnerships struck with South Africa, Indonesia, Vietnam and Senegal from 2021 onward — has run into serious trouble. And it is in the space opened up by that trouble that a quieter, less heralded model of cooperation, built by India over three decades of trade and lines of credit, is starting to look more durable than its modest scale would suggest.
Where the marquee model stalled
South Africa’s JETP was the template. Announced at COP26 in Glasgow in 2021 with an initial $8.5 billion pledge from a group of wealthy governments, it was billed by President Cyril Ramaphosa as a watershed and by then-UK Prime Minister Boris Johnson as a “game-changing partnership.” Three more countries signed similar deals over the following two years, and the combined pledges across all four eventually approached $47 billion.
The follow-through has been thin. Independent trackers found that as of late 2024, only around $308 million of grant-funded South African projects had actually reached implementation, out of a pledge that had by then grown to $13.8 billion on paper; across all four JETP countries, only about $18.6 billion of the roughly $47 billion envelope had reached legal close by April 2026 — a completion ratio under 40 percent, more than four years into the programme. Much of what has moved is not new decarbonisation spending but commercial loans and policy financing, some of it redirected to projects, like Jakarta’s mass transit system, that were never really part of the original climate remit. Then, in March 2025, the United States formally withdrew from South Africa’s JETP altogether, pulling out $56 million in grants and $1 billion in prospective development-finance lending. The remaining partners issued a statement of continued commitment, but the exit of the JETP’s largest non-European backer was a blunt signal about how fragile these pledges can be once domestic political winds shift in donor capitals.
None of this makes JETP-style finance worthless — where it has landed, it has funded real grid and renewables work — but it has exposed a structural mismatch: large, headline pledges built on complex multilateral governance, denominated mostly in commercial or semi-concessional debt, disbursed against conditions that assume institutional capacity African utilities frequently do not have. China’s alternative, heavy infrastructure lending under the Belt and Road umbrella, has filled some of that gap with speed, but at the cost of debt burdens that have become politically toxic in several recipient states, and with far less emphasis on the distributed, off-grid solutions that reach the rural and peri-urban populations who make up the bulk of Africa’s 590 million unconnected people.
The case for a third, smaller model
India’s energy engagement with Africa was not designed as an answer to either of these problems — it grew out of a much older trade and development relationship, with bilateral trade now running at roughly $82–100 billion a year and cumulative Indian investment on the continent near $80 billion since 1996. But its architecture happens to sidestep both of the failure modes visible in the JETP and Belt-and-Road experiences.
The financing runs primarily through concessional lines of credit under the Indian Development and Economic Assistance Scheme, administered by the Exim Bank of India, supplemented by grant-funded technical training through the Indian Technical and Economic Cooperation programme. New Delhi has extended more than 190 such lines of credit worth over $10 billion to 41 African countries, a large share of it directed at power generation, transmission and rural electrification — smaller in aggregate than either the JETP pledges or Chinese infrastructure lending, but structured to move faster because it does not depend on assembling a multi-donor governance committee for every disbursement.
The technology side leans in the same direction. Where JETP financing has gone disproportionately toward utility-scale grid and coal-transition projects, India has built its own domestic renewable programme — over 50 percent non-fossil share of installed power capacity, reached five years ahead of its own climate-pledge target, alongside roughly 172 gigawatts of annual solar-module manufacturing capacity — around decentralised, household- and farm-level deployment. The rooftop solar scheme PM Surya Ghar had installed more than four million systems domestically by August 2026, and the PM-KUSUM programme has done similar work subsidising solar irrigation pumps for farmers. Both are now being pitched, through the International Solar Alliance that India co-founded with France, as templates for African electrification. The ISA now counts roughly 39 African members, and is channelling that experience through instruments like the MIGA-ISA Solar Facility and a partnership with the African Development Bank’s Desert to Power initiative — positioning India less as a builder of large plants and more as a supplier of de-risking finance and small-footprint technology suited to dispersed, weak-grid populations, which is precisely the segment the IEA’s numbers show is being underserved by both Western and Chinese capital.
Two different countries, two different tests
South Africa and Ethiopia illustrate how differently this model plays out depending on what a partner country actually needs.
South Africa is the industrial test case. As a fellow BRICS member, it deals with India roughly as a peer rather than as an aid recipient, and the relationship has moved toward critical minerals and green hydrogen — South Africa’s platinum-group metals, used in electrolysers, are a natural complement to India’s own hydrogen ambitions, which depend on imported catalysts and battery inputs. The India–Southern African Customs Union Preferential Trade Agreement, signed in August 2026, is explicitly framed around securing supply of platinum-group metals, manganese and copper for India’s electric-vehicle and hydrogen industries, while a BRICS Joint Report on Hydrogen Value Chains released this year singles out South Africa and India as having complementary solar, wind and mineral endowments. This is a genuinely two-way commercial relationship, not a donor-recipient one, which is also why it sidesteps a criticism increasingly levelled at South Africa’s JETP — that it asks the country to choose between industrial growth and decarbonisation. India’s engagement, by contrast, treats South African industrialisation and green-hydrogen ambition as the same project.
Ethiopia is the harder test, because it is the kind of low-capacity, high-need market where all three financing models — JETP-style pledges, Chinese debt, and Indian concessional credit — have struggled in different ways. More than 45 percent of Ethiopians still lack electricity access, and the grid is roughly 90 percent hydropower-dependent, which leaves the country’s power supply exposed to drought. India elevated its relationship with Addis Ababa to a “strategic partnership” in December 2025, with energy and critical minerals named as priority areas, and Ethiopia has become one of the largest recipients of Indian development credit on the continent, alongside a roughly tenfold increase over the past decade in training slots offered to Ethiopian officials under the ITEC programme. Ethiopia was also among the earliest African members of the International Solar Alliance, with rooftop solar and solar irrigation pumps identified as the most transferable pieces of India’s domestic experience.
But Ethiopia is also where the limits of India’s concessional-lending model are most visible. In February 2024, the Indian government had to pay Exim Bank roughly ₹9,014 crore (close to $1.1 billion) after invoking sovereign guarantees on a set of underperforming lines of credit across several African markets — a category that reportedly included Ethiopian projects. That episode is a useful corrective to any narrative that presents Indian development finance as inherently more effective than its Western or Chinese counterparts. It is not immune to the same problem that has slowed JETP implementation: weak project preparation, patchy execution capacity on the recipient side, and financing structures that assume a level of institutional follow-through that does not always exist. India’s advantage is not that its credit always performs. It is that the amounts are smaller, the bureaucracy is thinner, and the technology is often simple enough — a rooftop panel, a solar pump — that failure is more localised and less likely to derail an entire multi-billion-dollar partnership the way stalled coal-plant financing has slowed the JETPs.
Scaling through multilateral platforms, not bilateral ambition alone
India’s own numbers make clear it cannot close Africa’s financing gap by itself. Cumulative Indian investment of roughly $80 billion since 1996, spread across four decades, is smaller than the annual investment the IEA says is needed just to close the electricity-access gap. What India brings instead is a set of multilateral levers it can pull as the 2026 chair of BRICS. The bloc’s New Development Bank has already shown what this can look like in practice, approving a $180 million loan to South Africa’s Eskom in 2019 for grid integration of renewables; a newly launched BRICS Digital Centre of Excellence for Smart Grids and Energy Storage is meant to extend that kind of technical cooperation across the bloc’s African members, including South Africa and Ethiopia, following commitments made at the June 2026 BRICS Energy Ministers’ meeting under India’s presidency. India’s own Global Biofuels Alliance, of which South Africa is a member, offers a further channel that could matter for a country like Ethiopia, where reliance on traditional biomass for cooking remains widespread and where the IEA estimates the clean-cooking financing gap for sub-Saharan Africa alone runs to roughly $4 billion a year.
None of this amounts to India displacing Western or Chinese capital in Africa; the scale gap is too large for that to be a realistic ambition, and it is not the one New Delhi appears to be pursuing. What India’s approach does offer, at a moment when the marquee Western model has just lost its largest backer and Chinese debt-financed infrastructure has generated its own political backlash, is a demonstration that smaller, faster-moving, technically modest cooperation — concessional credit lines administered without a multi-donor steering committee, and decentralised solar technology suited to the populations who are hardest to reach — can deliver results in the specific segment, off-grid and rural electrification, where the biggest pledges have struggled the most.
The limits of a model built on modesty
There is a temptation, in comparing India’s record against a stalled JETP and a reputationally damaged Belt-and-Road, to overstate the case for the Indian approach simply because it has generated fewer high-profile failures. That comparison is partly an artefact of scale: a $10 billion credit book spread across 41 countries produces far less catastrophic-sounding news than a single $47 billion multi-country pledge falling short, even if the smaller programme’s success rate, project for project, turns out to be no better. The Exim Bank’s need to invoke sovereign guarantees on underperforming loans in 2024 is proof that Indian concessional finance carries the same underlying risks — poor project preparation, weak recipient-side execution capacity, currency and political risk — that have slowed every other model of development finance operating on the continent. What differs is exposure: because Indian lines of credit are disbursed in smaller tranches to individual countries rather than bundled into headline multi-billion-dollar partnerships, a stalled project in one country does not derail a global narrative the way South Africa’s JETP shortfall has coloured perceptions of the entire Just Energy Transition concept.
There is also a question of durability that cuts the other way from the JETP comparison. Western climate pledges are vulnerable to shifts in domestic politics, as the US withdrawal from South Africa’s JETP demonstrated — but Indian development finance is not immune to its own version of that risk. The Exim Bank’s LOC guarantees are ultimately backed by the Indian exchequer, and a government facing its own fiscal pressures, or a shift in New Delhi’s strategic priorities toward, say, the Indo-Pacific or its own domestic energy build-out, could just as easily see African lending slow. What has protected the relationship so far is less institutional permanence than the fact that India’s stakes in Africa’s critical minerals, and its interest in African markets for its own solar manufacturing base, give it a commercial reason to stay engaged that is somewhat more durable than a purely aid-driven relationship would be.
That commercial logic, more than any claim to a superior development model, is probably the more honest explanation for why India’s Africa engagement has kept expanding even as Western climate finance has stalled and Chinese lending has become more selective. New Delhi needs South African platinum-group metals and Ethiopian rare-earth potential for its own battery and hydrogen ambitions; it needs African markets to absorb the excess capacity of a solar-manufacturing sector it has built up to roughly 172 gigawatts a year. Framing this as development cooperation is not wrong, but it understates how much of the relationship’s resilience comes from mutual commercial interest rather than altruism — which may, in the end, be exactly why it is proving more durable than pledges that depended on the goodwill of donor electorates thousands of miles away. Whether that model can be scaled without losing the speed and simplicity that make it work — and without succumbing to the same execution risks that undid a chunk of its own lending in Ethiopia — is the real test of India’s 2026 BRICS presidency, and of its Africa policy for the rest of the decade.
